As filed with the Securities and Exchange Commission on February 22, 2002
Registration No. 333--
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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BP Capital Markets America Inc. BP Capital Markets p.l.c.
(Exact name of Registrant as specified in (Exact name of Registrant as specified in
its charter) its charter)
DELAWARE ENGLAND and WALES
(State or other jurisdiction of (State or other jurisdiction of
Incorporation or organization) Incorporation or organization)
74-3028746 Not Applicable
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
200 East Randolph Drive Breakspear Park
Chicago, Illinois 60601 Breakspear Way
(312) 856-6111 Hemel Hempstead
(Address and telephone number of Herts HP2 4UL, England
Registrant's principal executive offices) (011) 44-1442-232323
(Address and telephone number of
Registrant's principal executive offices)
---------------------------------- --------------------------------- ----------------------------------
BP p.l.c. BP Australia Capital Markets Limited
BP Canada Finance Company (ACN 006 507 768)
(Exact name of Registrant as specified in (Exact name of Registrant as specified in its (Exact name of Registrant as specified in
its charter) charter) its charter)
NOVA SCOTIA ENGLAND and WALES AUSTRALIA
(State or other jurisdiction of (State or other jurisdiction of (State or other jurisdiction of
Incorporation or organization) Incorporation or organization) Incorporation or organization)
Not Applicable Not Applicable Not Applicable
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
240 - 4th Avenue S.W. Britannic House, 1 Finsbury Circus Level 29
Calgary, Alberta London EC2M 7BA, England The Tower
Canada, T2P 4H4 (011) 44-20-7496-4000 Melbourne Central
(403) 233-1313 (Address and telephone number of 360 Elizabeth Street
(Address and telephone number of Registrant's principal executive offices) Melbourne 3000
Registrant's principal executive offices) Daniel B. Pinkert Victoria, Australia
Corporate Secretary (011) 61-3-9268-4111
BP America Inc. (Address and telephone number of
200 East Randolph Drive Registrant's principal executive offices)
Chicago, Illinois 60601
(312) 856-6111
(Name, address and telephone number of agent
for service)
----------------------------------
Please send copies of all communications to:
Robert E. Buckholz, Jr., Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities to be Amount to be Offering Price per Aggregate Offering Registration
Registered Registered(1) Unit(2)(3) Price(2) Fee
- -------------------------------------------------------------------------------------------------------------------------
Guaranteed Debt Securities(4) ............ $6,000,000,000 100% $6,000,000,000 $552,000
Guarantees of the Debt Securities ........
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(1) In U.S. dollars or their equivalent in foreign denominated currencies or
composite currencies.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act.
(3) In no event will the aggregate initial public offering price of the
securities issued under this Registration Statement exceed $6,000,000,000
or if any Debt Securities are issued (i) at an original issue discount,
such greater amount as shall result in aggregate net proceeds not in excess
of $6,000,000,000 to the Registrants or (ii) with a principal amount
denominated in a foreign currency or composite currency, such amount as
shall result in an aggregate initial offering price equivalent to a maximum
of $6,000,000,000.
(4) Pursuant to Rule 457(n), no separate fee for the Guarantees is payable.
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The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion. Dated February 22, 2002
$6,000,000,000
BP CAPITAL MARKETS AMERICA INC.
BP CAPITAL MARKETS P.L.C.
BP CANADA FINANCE COMPANY
BP AUSTRALIA CAPITAL MARKETS LIMITED
GUARANTEED DEBT SECURITIES
Fully and unconditionally guaranteed by
BP p.l.c.
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BP Capital Markets America Inc., BP Capital Markets p.l.c., BP Canada
Finance Company and BP Australia Capital Markets Limited may use this prospectus
to offer from time to time guaranteed debt securities.
You should read this prospectus and the accompanying prospectus
supplement carefully before you invest. We may sell these securities to or
through underwriters, and also to other purchasers or through agents. The names
of the underwriters will be set forth in the accompanying prospectus supplement.
Investing in these securities involves certain risks. See "Risk
Factors" beginning on page 3.
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Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities, or passed upon
the accuracy or adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
---------------
Prospectus dated , 2002.
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS ..................................................3
RISK FACTORS ...........................................................4
FORWARD-LOOKING STATEMENTS .............................................4
WHERE YOU CAN FIND MORE INFORMATION ABOUT US ...........................5
BP p.l.c. ..............................................................6
DESCRIPTION OF BP DEBT ISSUERS .........................................6
RATIO OF EARNINGS TO FIXED CHARGES .....................................7
CAPITALIZATION AND INDEBTEDNESS OF BP p.l.c. ...........................8
USE OF PROCEEDS ........................................................8
LEGAL OWNERSHIP ........................................................9
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES .........................11
CLEARANCE AND SETTLEMENT ..............................................21
TAX CONSIDERATIONS ....................................................25
PLAN OF DISTRIBUTION ..................................................46
VALIDITY OF SECURITIES ................................................47
EXPERTS ...............................................................48
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES ...........................49
EXPENSES ..............................................................50
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the U.S. Securities and Exchange Commission, or the SEC, utilizing a shelf
registration process. Under this shelf process, we may sell the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $6,000,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of those securities and their offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information About Us".
In this prospectus, the terms "we," "our" and "us" refer to BP p.l.c.,
BP Capital Markets America Inc., BP Capital Markets p.l.c., BP Canada Finance
Company and BP Australia Capital Markets Limited; "BP" refers to BP p.l.c.; the
"BP Group" refers to BP and its subsidiaries; and "BP Debt Issuers" refers to BP
Capital Markets America Inc., BP Capital Markets p.l.c., BP Canada Finance
Company and BP Australia Capital Markets Limited, collectively, each a "BP Debt
Issuer". Each of the BP Debt Issuers may be the issuer in an offering of debt
securities. BP will be the guarantor in an offering of debt securities of the BP
Debt Issuers, which are referred to as guaranteed debt securities.
RISK FACTORS
Investing in the securities offered using this prospectus involves
risk. You should consider carefully the risks described below, together with the
risks described in the documents incorporated by reference into this prospectus
and any risk factors included in the prospectus supplement, before you decide to
buy our securities. If any of these risks actually occur, our business,
financial condition and results of operations could suffer, and the trading
price and liquidity of the securities offered using this prospectus could
decline, in which case you may lose all or part of your investment.
Risks Relating to BP's Business
There is strong competition, both within the oil industry and with
other industries, in supplying the fuel needs of commerce, industry and the
home.
The oil industry is particularly subject to regulation and intervention
by governments throughout the world in such matters as the award of exploration
and production interests, the imposition of specific drilling obligations,
environmental protection controls, control over the development and
decommissioning of a field (including restrictions on production) and, possibly,
nationalization, expropriation or cancellation of contract rights.
The oil industry is also subject to the payment of royalties and
taxation, which tend to be high compared with those payable in respect of other
commercial activities.
Exploration and production require high levels of investment and have
particular economic risks and opportunities. They are subject to natural hazards
and other uncertainties, including those relating to the physical
characteristics of an oil or natural gas field.
Oil prices are subject to international supply and demand. Political
developments (especially in the Middle East) and the outcome of meetings of OPEC
can particularly affect world oil supply and oil prices.
Oil products marketing can be affected by intense competition.
Refining profitability can be volatile with both oversupply and
periodic supply tightness in various regional markets.
Crude oil prices are generally set in dollars while sales of refined
products may be in a variety of currencies. Fluctuation in exchange rates can
therefore give rise to foreign exchange exposures.
Sectors of the chemicals industry are also subject to fluctuations in
supply and demand within the chemicals market, with consequent effect on prices
and profitability, and to governmental regulation and intervention in such
matters as safety and environmental controls.
In addition to the adverse effect on revenues, margins and
profitability from any future fall in oil and natural gas prices, a prolonged
period of low prices or other indicators would lead to a review for impairment
of the BP Group's oil and natural gas properties. This review would reflect
management's view of long-term oil and natural gas prices. Such a review could
result in a charge for impairment which could have a significant effect on the
BP Group's results of operations in the period in which it occurs.
FORWARD-LOOKING STATEMENTS
This prospectus, including documents incorporated by reference, and the
related prospectus supplement may contain statements regarding our assumptions,
projections, expectations, intentions or beliefs about future events. These
statements are intended as "Forward-Looking Statements" under the Private
Securities Litigation Reform Act of 1995. These statements may generally, but
not always, be identified by the use of words such as `anticipates', `should',
`expects', `estimates', `believes' or similar expressions. In particular,
forward-looking statements include (i) certain statements with regard to
management aims and objectives, planned expansion,
1
investment or other projects, expected or targeted production volume, capacity
or rate, the date or period in which production is scheduled or expected to come
on stream or a project or action is scheduled or expected to be completed, (ii)
the statements with respect to the BP Group's ratio of net debt to net debt plus
equity, dividend policy, the manner in which BP uses cash surpluses, the target
to reduce the combined cost structure of the BP Group, return on average capital
employed, production targets, targeted performance improvements and effect on
pre-tax results, and levels of annual investment and (iii) the statements with
regard to trends in the trading environment, oil and gas prices, refining,
marketing and chemicals margins, inventory and product stock levels, supply
capacity, profitability, results of operations, liquidity or financial position.
By their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these forward-looking
statements, including:
o Future levels of industry product supply, demand and pricing;
o Political stability and economic growth in relevant areas of the world;
o Development and use of new technology and successful partnering;
o The actions of competitors;
o Natural disasters and other changes in business conditions;
o Wars and acts of terrorism or sabotage; and
o Other factors discussed under "Risk Factors" and elsewhere in this
document.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
BP files annual reports and other reports and information with the SEC.
You may read and copy any document BP files at the SEC's public reference rooms
in Washington, D.C. and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. In addition, BP's SEC
filings are available to the public at the SEC's web site at http://www.sec.gov.
BP's American depositary shares are listed on the New York, Chicago and
Pacific stock exchanges. BP's ordinary shares are admitted to trading on the
London Stock Exchange plc and listed in France, Germany, Japan and Switzerland.
You can consult reports and other information about BP that it filed pursuant to
the rules of the London Stock Exchange and the New York Stock Exchange at such
exchanges.
The SEC allows BP to "incorporate by reference" into this prospectus
the information in documents filed with the SEC. This means that BP can disclose
important information to you by referring you to those documents. Each document
incorporated by reference is current only as of the date of such document, and
the incorporation by reference of such documents shall not create any
implication that there has been no change in our affairs since the date thereof
or that the information contained therein is current as of any time subsequent
to its date. The information incorporated by reference is considered to be a
part of this prospectus and should be read with the same care. When BP updates
the information contained in documents that have been incorporated by reference
by making future filings with the SEC, the information incorporated by reference
in this prospectus is considered to be automatically updated and superseded. In
other words, in the case of a conflict or inconsistency between information
contained in this prospectus and information incorporated by reference into this
prospectus, you should rely on the information contained in the document that
was filed later.
BP incorporates by reference the documents listed below and any
documents BP files with the SEC in the future under Section 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") until the
offerings made under this prospectus are completed:
o Annual Report on Form 20-F for the year ended December 31, 2000.
2
o Reports on Form 6-K filed on May 24, 2001, August 17, 2001,
November 21, 2001 and February 19, 2002 and the Report on Form
6-K/A filed on February 20, 2002.
Furthermore, BP incorporates by reference any reports on Form 6-K
furnished to the SEC by BP pursuant to the Exchange Act that indicate on their
cover page that they are incorporated by reference in this prospectus after the
date of this prospectus and before the date that any offering of the securities
by means of this prospectus is terminated.
The Annual Report on Form 20-F of BP contains a summary description of
BP's business and audited consolidated financial statements with a report by our
independent auditors. These financial statements are prepared in accordance with
generally accepted accounting principles applicable in the United Kingdom. We
refer to these accounting principles as U.K. GAAP in this prospectus. The Annual
Report on Form 20-F of BP also presents the effects of the differences on our
audited consolidated financial statements between U.K. GAAP and generally
accepted accounting principles applicable in the United States. We refer to the
latter accounting principles as U.S. GAAP in this prospectus.
You may request a copy of these filings, other than an exhibit to a
filing unless that exhibit is specifically incorporated by reference into that
filing, at no cost, by writing to or telephoning BP at the following address:
BP p.l.c.
Britannic House, 1 Finsbury Circus
London, EC2M 7BA, England
(011) 44-20-7496-4000
You should rely only on the information that we incorporate by
reference or provide in this prospectus or the prospectus supplement. We have
not authorized anyone to provide you with different information. We are not
making an offer of these securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this prospectus or the
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
BP p.l.c.
BP was created on December 31, 1998 by the merger of Amoco Corporation
of the United States and The British Petroleum Company p.l.c. of the U.K
Following this merger, Amoco Corporation became a wholly-owned subsidiary of The
British Petroleum Company p.l.c. and was renamed BP Amoco Corporation, and The
British Petroleum Company p.l.c. was renamed BP Amoco p.l.c. Amoco Corporation
was incorporated in Indiana, USA, in 1889 and The British Petroleum Company
p.l.c. was incorporated in 1909 in England. On April 14, 2000, BP acquired the
Atlantic Richfield Company and on July 7, 2000, BP completed its successful
tender offer for Burmah Castrol plc of England. To signify the single entity
that has successfully been created through these combinations, the name of the
company was changed to BP p.l.c. with effect from May 1, 2001.
DESCRIPTION OF BP DEBT ISSUERS
Financial Statements And Issuer Identity
We do not present separate financial statements of the BP Debt Issuers
in this prospectus because management has determined that they would not be
material to investors. BP will fully and unconditionally guarantee the
guaranteed debt securities issued by the BP Debt Issuers as to payment of
principal, premium, if any, interest and any other amounts due.
BP will determine the identity of an issuer relating to a particular
series of debt securities in light of considerations related to the funding
needs of BP and its consolidated subsidiaries. These include:
o the anticipated use of proceeds;
3
o related funding requirements of BP and its consolidated
subsidiaries; and
o relevant tax considerations.
BP Capital Markets America Inc.
BP Capital Markets America Inc. ("BP Capital America") is a
wholly-owned indirect subsidiary of BP and was incorporated under the laws of
Delaware on February 15, 2002. BP Capital America is a financing vehicle for the
BP Group and issues debt securities on behalf of the BP Group. BP Capital
America will lend substantially all proceeds of its borrowings to the BP Group.
BP Capital Markets p.l.c.
BP Capital Markets p.l.c. ("BP Capital U.K.") is a wholly-owned
indirect subsidiary of BP and was incorporated under the laws of England and
Wales on December 14, 1976. BP Capital U.K. is a financing vehicle for the BP
Group and issues debt securities and commercial paper on behalf of the BP Group.
BP Capital U.K. will lend substantially all proceeds of its borrowings to the BP
Group.
BP Canada Finance Company
BP Canada Finance Company ("BP Canada") is a wholly-owned indirect
subsidiary of BP and was incorporated under the laws of Nova Scotia on February
18, 2002. BP Canada is a financing vehicle for the BP Group and issues debt
securities on behalf of the BP Group. BP Canada will lend substantially all
proceeds of its borrowings to the BP Group.
BP Australia Capital Markets Limited
BP Australia Capital Markets Limited ("BP Australia") is a wholly-owned
indirect subsidiary of BP and was incorporated in the Commonwealth of Australia
on December 18, 1985. BP Australia is a financing vehicle for the BP Group and
issues debt securities and commercial paper on behalf of the BP Group. BP
Australia will lend substantially all proceeds of its borrowings to the BP
Group.
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Nine months
ended September 30 Years ended December 31,
------------------ ------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
For the BP Group(1) ................... 10.3 11.5 9.7 5.7 4.3 7.9 7.8
For the BP Group adjusted to accord
with U.S. GAAP(2) ................ 9.4 11.3 9.2 5.6 4.1 7.6 7.8
Fixed charges for both computations consist of interest (including
capitalized interest) on all indebtedness, amortization of debt discount and
expense and that portion of rental expense representative of the interest
factor.
(1) Earnings consist of profit before taxation, after eliminating the
BP Group's share of undistributed income of associated undertakings, plus fixed
charges (excluding capitalized interest).
(2) Earnings consist of the earnings available for payment of fixed
charges as determined for BP Group, in accordance with U.K. GAAP, after taking
account of adjustments to profit before taxation to accordance with U.S. GAAP.
4
(3) As of December 31, 2001, the ratio of earnings to fixed charges for
the BP Group, in accordance with U.K. GAAP, was 8.3.
CAPITALIZATION AND INDEBTEDNESS OF BP p.l.c.
The following table shows the unaudited consolidated capitalization and
indebtedness of the BP Group, extracted from the Annual Accounts as of December
31, 2001:
As of December 31,
2001
(US$ million)
-----------------------
Share capital
Authorized share capital (1) ........................ 9,021
Called up share capital (2,3) ....................... 5,629
Share premium ....................................... 3,590
Merger reserve ...................................... 26,983
Capital redemption reserve .......................... 424
Other reserves ...................................... 247
-----------------------
Total share capital ................................. 36,873
-----------------------
Finance debt (4-8)
Due after within one year ........................... 9,090
Due after more than one year ........................ 12,327
-----------------------
Total finance debt .................................. 21,417
-----------------------
Total Capitalization (9) ............................ 58,290
=======================
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(1) Authorized share capital comprises 36 billion ordinary shares, par value
US$0.25 per share, and 12,750,000 cumulative preference shares, par
value(pound)1 per share.
(2) Issued and outstanding share capital as of December 31, 2001 comprises
22,432,076,754 ordinary shares, par value US$0.25 per share, and
12,706,252 preference shares, par value(pound)1 per share.
(3) Issued and outstanding share capital as of February 15, 2002 comprises
22,440,558,599 ordinary shares, par value US$0.25 per share, and
12,706,252 preference shares, par value(pound)1 per share.
(4) Finance debt recorded in currencies other than U.S. dollars has been
translated into U.S. dollars at the relevant exchange rates existing on
December 31, 2001.
(5) Obligations under finance leases are included in the above table.
(6) As of December 31, 2001, BP had outstanding guarantees totaling US$
15,266 million, of which US$ 15,209 million related to guarantees in
respect of borrowings by its subsidiary undertakings. Thus 93% of the
finance debt had been guaranteed by BP. BP has no material outstanding
contingent liabilities. All of BP's debt is unsecured.
(8) As of February 15, 2002, BP's outstanding U.S. and Euro commercial
paper, reported under Finance debt due within one year in the above
table, had increased by US$ 2,795 million equivalent.
(9) Apart from the changes in notes (3) and (8) above, there has been no
material change since December 31, 2001 in the consolidated
capitalization, indebtedness or contingent liabilities of BP.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement,
the net proceeds from the sale of securities will be used for general corporate
purposes. These include working capital for BP or other companies in the BP
Group and the repayment of existing borrowings of BP and its subsidiaries.
5
LEGAL OWNERSHIP
Street Name and Other Indirect Holders
We generally will not recognize investors who hold securities in
accounts at banks or brokers as legal holders of securities. When we refer to
the holders of securities, we mean only the actual legal and (if applicable)
record holder of those securities. Holding securities in accounts at banks or
brokers is called holding in street name. If you hold securities in street name,
we will recognize only the bank or broker or the financial institution the bank
or broker uses to hold its securities. These intermediary banks, brokers and
other financial institutions pass along principal, interest and other payments
on the securities, either because they agree to do so in their customer
agreements or because they are legally required. If you hold securities in
street name, you should check with your own institution to find out:
o how it handles securities payments and notices;
o whether it imposes fees or charges;
o how it would handle voting if it were ever required to vote;
o whether and how you can instruct it to send you securities
registered in your own name so you can be a direct holder as
described below; and
o how it would pursue rights under the securities if there were
a default or other event triggering the need for holders to
act to protect their interests.
Direct Holders
Our obligations, as well as the obligations of the trustee and those of
any third parties employed by us or the trustee, under the securities run only
to persons who are registered as holders of securities. As noted above, we do
not have obligations to you if you hold in street name or other indirect means,
either because you choose to hold securities in that manner or because the
securities are issued in the form of global securities as described below. For
example, once we make payment to the registered holder, we have no further
responsibility for the payment even if that holder is legally required to pass
the payment along to you as a street name customer but does not do so.
Global Securities
What is a Global Security?
A global security is a special type of indirectly held security, as
described above under "Street Name and Other Indirect Holders". If we choose to
issue securities in the form of global securities, the ultimate beneficial
owners can only be indirect holders.
We require that the securities included in the global security not be
transferred to the name of any other direct holder unless the special
circumstances described below occur. The financial institution that acts as the
sole direct holder of the global security is called the depositary. Any person
wishing to own a security must do so indirectly by virtue of an account with a
broker, bank or other financial institution that in turn has an account with the
depositary. The prospectus supplement relating to an offering of a series of
securities will indicate whether the series will be issued only in the form of
global securities.
Special Investor Considerations for Global Securities
As an indirect holder, an investor's rights relating to a global
security will be governed by the account rules of the investor's financial
institution and of the depositary, as well as general laws relating to
securities transfers. We do not recognize this type of investor as a holder of
securities and instead deal only with the depositary that holds the global
security.
6
If you are an investor in securities that are issued only in the form
of global securities, you should be aware that:
o You cannot get securities registered in your own name.
o You cannot receive physical certificates for your interest in
the securities.
o You will be a street name holder and must look to your own
bank or broker for payments on the securities and protection
of your legal rights relating to the securities, as explained
earlier under "Street Name and Other Indirect Holders".
o You may not be able to sell interests in the securities to
some insurance companies and other institutions that are
required by law to own their securities in the form of
physical certificates.
o The depositary's policies will govern payments, transfers,
exchange and other matters relating to your interest in the
global security. We and the trustee have no responsibility for
any aspect of the depositary's actions or for its records of
ownership interests in the global security. We and the trustee
also do not supervise the depositary in any way.
o The depositary will require that interests in a global
security be purchased or sold within its system using same-day
funds. By contrast, payment for purchases and sales in the
market for corporate bonds and other securities is generally
made in next-day funds. The difference could have some effect
on how interests in global securities trade, but we do not
know what that effect will be.
Special Situations When the Global Security Will Be Terminated
In a few special situations described below, the global security will
terminate and interests in it will be exchanged for physical certificates
representing securities. After that exchange, the choice of whether to hold
securities directly or in street name will be up to the investor. Investors must
consult their own bank or brokers to find out how to have their interests in
securities transferred to their own name so that they will be direct holders.
The rights of street name investors and direct holders in the securities have
been previously described in the subsections entitled "--Street Name and Other
Indirect Holders" and "--Direct Holders".
The special situations for termination of a global security are:
o When the depositary notifies us that it is unwilling, unable
or no longer qualified to continue as depositary.
o When an event of default on the securities has occurred and
has not been cured. Defaults on debt securities are discussed
below under "Description of Debt Securities and
Guarantees--Default and Related Matters--Events of Default".
The prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series of
securities covered by the prospectus supplement. When a global security
terminates, the depositary, and not we or the trustee, is responsible for
deciding the names of the institutions that will be the initial direct holders.
- --------------------------------------------------------------------------------
In the remainder of this description "you" means direct holders and not street
name or other indirect holders of securities. Indirect holders should read the
previous subsection entitled "Street Name and Other Indirect Holders".
- --------------------------------------------------------------------------------
7
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
Each of the BP Debt Issuers may issue guaranteed debt securities using
this prospectus. As required by U.S. federal law for all bonds and notes of
companies that are publicly offered, the debt securities are governed by a
document called the indenture. Each of the BP Debt Issuers will enter into an
indenture with JPMorgan Chase Bank.
The trustee under each of the indentures has two main roles:
o first, it can enforce your rights against us if we default.
There are some limitations on the extent to which the trustee
acts on your behalf, described under "Default and Related
Matters--Events of Default--Remedies If an Event of Default
Occurs" below; and
o second, the trustee performs administrative duties for us,
such as sending you interest payments, transferring your debt
securities to a new buyer if you sell and sending you notices.
BP acts as the guarantor of the guaranteed debt securities issued under
the BP Debt Issuers' indentures. The guarantees are described under "Guarantees"
below.
The indentures and their associated documents contain the full legal
text governing the matters described in this section. The indentures, the debt
securities and the guarantees are governed by New York law. The indentures are
exhibits to our registration statement. See "Where You Can Find More Information
About Us" for information on how to obtain a copy.
This section summarizes the material provisions of the indentures,
which are substantially identical to each other, the debt securities and the
guarantees. However, because it is a summary, it does not describe every aspect
of the indentures, the debt securities or the guarantees. This summary is
subject to and qualified in its entirety by reference to all the provisions of
the indentures, including some of the terms used in the indentures. We describe
the meaning for only the more important terms. We also include references in
parentheses to some sections of the indentures. Whenever we refer to particular
sections or defined terms of the indentures in this prospectus or in the
prospectus supplement, those sections or defined terms are incorporated by
reference here or in the prospectus supplement. This summary also is subject to
and qualified by reference to the description of the particular terms of your
series described in the prospectus supplement.
The BP Debt Issuers may each issue as many distinct series of debt
securities under its respective indenture as it wishes. This section summarizes
all material terms of the debt securities that are common to all series, unless
otherwise indicated in the prospectus supplement relating to a particular
series.
We may issue the debt securities as original issue discount securities,
which are debt securities that are offered and sold at a substantial discount to
their stated principal amount. (Section 101) Special U.S. federal income tax,
accounting and other considerations may apply to original issue discount
securities. These considerations will be described in the prospectus supplement
relating to any original issue discount securities that may be issued. The debt
securities may also be issued as indexed securities or securities denominated in
foreign currencies or currency units, as described in more detail in the
prospectus supplement relating to any such debt securities.
In addition, the specific financial, legal and other terms particular
to a series of debt securities are described in the prospectus supplement and
the pricing agreement relating to the series. Those terms may vary from the
terms described here. Accordingly, this summary also is subject to and qualified
by reference to the description of the terms of the series described in the
prospectus supplement.
The prospectus supplement relating to a series of debt securities will
describe the following terms of the series:
o which of the BP Debt Issuers is the issuer of the debt
securities;
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o the title of the series of debt securities;
o any limit on the aggregate principal amount of the series of
debt securities;
o any stock exchange on which we will list the series of debt
securities;
o the date or dates on which we will pay the principal of the
series of debt securities;
o the rate or rates, which may be fixed or variable, per annum
at which the series of debt securities will bear interest, if
any, and the date or dates from which that interest, if any,
will accrue;
o the dates on which interest, if any, on the series of debt
securities will be payable and the regular record dates for
the interest payment dates;
o any mandatory or optional sinking funds or analogous
provisions or provisions for redemption at the option of the
holder;
o the date, if any, after which and the price or prices at which
the series of debt securities may, in accordance with any
optional or mandatory redemption provisions that are not
described in this prospectus, be redeemed and the other
detailed terms and provisions of those optional or mandatory
redemption provisions, if any;
o the denominations in which the series of debt securities will
be issuable if other than denominations of $1,000 and any
integral multiple of $1,000;
o the currency of payment of principal, premium, if any, and
interest on the series of debt securities if other than the
currency of the United States of America and the manner of
determining the equivalent amount in the currency of the
United States of America;
o any index used to determine the amount of payment of principal
of, premium, if any, and interest on the series of debt
securities;
o the applicability of the provisions described later under
"Covenants--Defeasance and Discharge";
o whether we will be required to pay additional amounts for
withholding taxes or other governmental charges and, if
applicable, a related right to an optional tax redemption for
such a series;
o whether the series of debt securities will be issuable in
whole or part in the form of a global security as described
under "Legal Ownership--Global Securities", and the depositary
or its nominee with respect to the series of debt securities,
and any special circumstances under which the global security
may be registered for transfer or exchange in the name of a
person other than the depositary or its nominee; and
o any other special features of the series of debt securities.
Unless otherwise stated in the prospectus supplement, the debt
securities will be issued only in fully registered form without interest
coupons.
Guarantees
BP will fully and unconditionally guarantee the payment of the
principal of, premium, if any, and interest on the guaranteed debt securities,
including certain additional amounts which may be payable under the guarantees,
as described under "--Payment of Additional Amounts". BP guarantees the payment
of such amounts when such
9
amounts become due and payable, whether at the stated maturity of the debt
securities, by declaration or acceleration, call for redemption or otherwise.
Overview of Remainder of This Description
The remainder of this description summarizes:
o Additional mechanics relevant to the debt securities under
normal circumstances, such as how you transfer ownership and
where we make payments.
o Your rights under several special situations, such as if we
merge with another company or if we want to change a term of
the debt securities.
o Your rights to receive payment of additional amounts due to
changes in U.K., Canada and Australia tax withholding or
deduction requirements.
o Your rights if we default or experience other financial
difficulties.
o Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. (Section
305) This is called an exchange.
You may exchange or transfer registered debt securities at the office
of the trustee. The trustee acts as our agent for registering debt securities in
the names of holders and transferring registered debt securities. We may change
this appointment to another entity or perform the service ourselves. The entity
performing the role of maintaining the list of registered holders is called the
security registrar. It will also register transfers of the registered debt
securities. (Section 305)
You will not be required to pay a service charge to transfer or
exchange debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange of a registered debt security will only be made if the security
registrar is satisfied with your proof of ownership.
If we have designated additional transfer agents, they are named in the
prospectus supplement. We may cancel the designation of any particular transfer
agent. We may also approve a change in the office through which any transfer
agent acts. (Section 1002)
If the debt securities are redeemable and we redeem less than all of
the debt securities of a particular series, we may block the transfer or
exchange of debt securities during a specified period of time in order to freeze
the list of holders to prepare the mailing. The period begins 15 days before the
day we mail the notice of redemption and ends on the day of that mailing. We may
also refuse to register transfers or exchanges of debt securities selected for
redemption. However, we will continue to permit transfers and exchanges of the
unredeemed portion of any security being partially redeemed. (Section 305)
Payment and Paying Agents
We will pay interest to you if you are a direct holder listed in the
trustee's records at the close of business on a particular day in advance of
each due date for interest, even if you no longer own the security on the
interest
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due date. That particular day, usually about two weeks in advance of the
interest due date, is called the regular record date and is stated in the
prospectus supplement. (Section 307)
We will pay interest, principal and any other money due on the
registered debt securities at the corporate trust office of the trustee in New
York City. That office is currently located at JPMorgan Chase Bank, 450 West
33rd Street, New York, New York 10001. You must make arrangements to have your
payments picked up at or wired from that office. We may also choose to pay
interest by mailing checks. Interest on global securities will be paid to the
holder thereof by wire transfer of same-day funds.
Holders buying and selling debt securities must work out between them
how to compensate for the fact that we will pay all the interest for an interest
period to the one who is the registered holder on the regular record date. The
most common manner is to adjust the sales price of the debt securities to pro
rate interest fairly between buyer and seller. This pro rated interest amount is
called accrued interest.
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Street name and other indirect holders should consult their banks or brokers for
information on how they will receive payments.
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We may also arrange for additional payment offices, and may cancel or
change these offices, including our use of the trustee's corporate trust office.
These offices are called paying agents. We may also choose to act as our own
paying agent. We must notify you through the trustee of changes in the paying
agents for any particular series of debt securities. (Section 1002)
Notices
We and the trustee will send notices only to direct holders, using
their addresses as listed in the trustee's records. (Section 106)
Regardless of who acts as paying agent, all money that we pay to a
paying agent that remains unclaimed at the end of two years after the amount is
due to direct holders will be repaid to us. After that two-year period, you may
look only to us for payment and not to the trustee, any other paying agent or
anyone else. (Section 1006)
Special Situations
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company
or firm. We are also permitted to sell or lease substantially all of our assets
to another corporation or other entity or to buy or lease substantially all of
the assets of another corporation or other entity. No vote by holders of debt
securities approving any of these actions is required, unless as part of the
transaction we make changes to the indenture requiring your approval, as
described below under "--Modification and Waiver". We may take these actions as
part of a transaction involving outside third parties or as part of an internal
corporate reorganization. We may take these actions even if they result in:
o a lower credit rating being assigned to the debt securities;
or
o additional amounts becoming payable in respect of U.K.,
Canadian or Australian withholding tax, and the debt
securities thus being subject to redemption at our option, as
described below under "--Optional Tax Redemption".
We have no obligation under the indenture to seek to avoid these
results, or any other legal or financial effects that are disadvantageous to
you, in connection with a merger, consolidation or sale or lease of assets that
is permitted under the indenture. However, we may not take any of these actions
unless all the following conditions are met:
o Where the BP Debt Issuers or BP, as applicable, merges out of
existence or sells or leases substantially all of its assets,
the other entity must assume its obligations on the debt
securities or
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the guarantees. Such other entity must be organized under the
laws of such BP entity's jurisdiction or a political
subdivision thereof.
o The merger, sale or lease of assets or other transaction must
not cause a default on the debt securities, and we must not
already be in default. For purposes of this no-default test, a
default would include an event of default that has occurred
and not been cured, as described below under "Default and
Related Matters--Events of Default--What is An Event of
Default?" A default for this purpose would also include any
event that would be an event of default if the requirements
for giving us default notice or our default having to exist
for a specific period of time were disregarded.
o It is possible that the merger, sale or lease of assets or
other transaction would cause some of our property to become
subject to a mortgage, security interest, lien or other legal
mechanism giving lenders preferential rights in that property
over other lenders or over our general creditors if we fail to
pay them back.
It is possible that the U.S. Internal Revenue Service may deem a merger
or other similar transaction to cause an exchange for U.S. federal income tax
purposes of debt securities for new securities by the holders of the debt
securities. This could result in the recognition of taxable gain or loss for
U.S. federal income tax purposes and possible other adverse tax consequences.
Modification and Waiver
There are three types of changes we can make to the indentures and the
debt securities.
Changes Requiring Your Approval. First, there are changes that cannot
be made to your debt securities without your specific approval. We must obtain
your specified approval in order to:
o change the stated maturity of the principal or interest on a
debt security;
o reduce any amounts due on a debt security;
o reduce the amount of principal payable upon acceleration of
the maturity of a debt security following a default;
o change the place or currency of payment on a debt security;
o impair your right to sue for payment;
o reduce the percentage of holders of debt securities whose
consent is needed to modify or amend the indentures;
o reduce the percentage of holders of debt securities whose
consent is needed to waive compliance with various provisions
of the indentures or to waive various defaults;
o modify any other aspect of the provisions dealing with
modification and waiver of the indentures; and
o change the obligations of BP to pay any principal, premium or
interest under the guarantees. (Section 902)
Changes Requiring a Majority Vote. The second type of change to the
indentures and the debt securities is the kind that requires a vote in favor by
holders of debt securities owning a majority of the principal amount of the
particular series affected. Most changes fall into this category, except for
clarifying changes and other changes that
12
would not adversely affect holders of the debt securities in any material
respect. The same vote would be required for us to obtain a waiver of all or
part of the covenants described below, or a waiver of a past default. However,
we cannot obtain a waiver of a payment default or any other aspect of the
indentures or the debt securities listed in the first category described
previously under "Changes Requiring Your Approval" unless we obtain your
individual consent to the waiver. (Section 513)
Changes Not Requiring Approval. The third type of change does not
require any vote by holders of debt securities. This type is limited to
clarifications and other changes that would not adversely affect holders of the
debt securities in any material respect. (Section 901)
Further Details Concerning Voting. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a security:
o For original issue discount securities, we will use the
principal amount that would be due and payable on the voting
date if the maturity of the debt securities were accelerated
to that date because of a default.
o For debt securities whose principal amount is not known (for
example, because it is based on an index), we will use a
special rule for that security described in the prospectus
supplement.
o For debt securities denominated in one or more foreign
currencies or currency units, we will use the U.S. dollar
equivalent as of the date of original issuance.
o Debt securities will not be considered outstanding, and
therefore not eligible to vote, if we have deposited or set
aside in trust for you money for their payment or redemption.
Debt securities will also not be eligible to vote if they have
been fully defeased as described later under
"Covenants--Defeasance and Discharge". (Section 101)
o We will generally be entitled to set any day as a record date
for the purpose of determining the holders of outstanding debt
securities that are entitled to vote or take other action
under the indenture. If we set a record date for a vote or
other action to be taken by holders of a particular series,
that vote or action may be taken only by persons who are
holders of outstanding debt securities of that series on the
record date and must be taken within 90 days following the
record date or another period that we may specify (or as the
trustee may specify, if it set the record date). We may
shorten or lengthen (but not beyond 90 days) this period from
time to time. (Sections 501, 502, 512, 513 and 902)
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Street name and other indirect holders should consult their banks or brokers for
information on how approval may be granted or denied if we seek to change the
indenture or the debt securities or request a waiver.
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Redemption and Repayment
Unless otherwise indicated in the prospectus supplement, your debt
security will not be entitled to the benefit of any sinking fund -- that is, we
will not deposit money on a regular basis into any separate custodial account to
repay your debt securities. In addition, we will not be entitled to redeem your
debt security before its stated maturity unless the prospectus supplement
specifies a redemption commencement date. You will not be entitled to require us
to buy your debt security from you, before its stated maturity, unless the
related prospectus supplement specifies one or more repayment dates.
If the prospectus supplement specifies a redemption commencement date
or a repayment date, it will also specify one or more redemption prices or
repayment prices, which may be expressed as a percentage of the principal amount
of your debt security or by reference to one or more formulae used to determine
the redemption price(s). It may also specify one or more redemption periods
during which the redemption prices relating to a redemption of debt securities
during those periods will apply.
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If the prospectus supplement specifies a redemption commencement date,
we may redeem your debt security at our option at any time on or after that
date. If we redeem your debt security, we will do so at the specified redemption
price, together with interest accrued to the redemption date. If different
prices are specified for different redemption periods, the price we pay will be
the price that applies to the redemption period during which your debt security
is redeemed.
If the prospectus supplement specifies a repayment date, your debt
security will be repayable by us at your option on the specified repayment
date(s) at the specified repayment price(s), together with interest accrued to
the repayment date.
In the event that we exercise an option to redeem any debt security, we
will give written notice of the principal amount of the debt security to be
redeemed to the holder at least 45 days before the applicable redemption date
and to the trustee not more than 30 days nor more than 60 days before the
applicable redemption date. We will give the notice in the manner described
above under "Additional Mechanics--Notices".
If a debt security represented by a global security is subject to
repayment at the holder's option, the depositary or its nominee, as the holder,
will be the only person that can exercise the right to repayment. Any indirect
holders who own beneficial interests in the global security and wish to exercise
a repayment right must give proper and timely instructions to their banks or
brokers through which they hold their interests, requesting that they notify the
depositary to exercise the repayment right on their behalf. Different firms have
different deadlines for accepting instructions from their customers, and you
should take care to act promptly enough to ensure that your request is given
effect by the depositary before the applicable deadline for exercise.
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Street name and other indirect holders should contact their banks or brokers for
information about how to exercise a repayment right in a timely manner.
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We or our affiliates may purchase debt securities from investors who
are willing to sell from time to time, either in the open market at prevailing
prices or in private transactions at negotiated prices. Debt securities that we
or they purchase may, in our discretion, be held, resold or canceled.
Payment of Additional Amounts
The government of any jurisdiction where BP or BP Capital U.K., BP
Canada or BP Australia is incorporated may require BP or BP Capital U.K.,
BP Canada or BP Australia to withhold or deduct amounts from payments on
the principal or interest on a debt security or any amounts to be paid
under the guarantees for or on account of taxes or any other governmental
charges. If the jurisdiction requires a withholding or deduction of this type,
BP or BP Capital U.K., BP Canada or BP Australia, as the case may be, may be
required to pay you an additional amount so that the net amount you receive will
be the amount specified in the debt security to which you are entitled. However,
in order for you to be entitled to receive the additional amount, you must not
be resident in the jurisdiction that requires the withholding or deduction.
BP or BP Capital U.K., BP Canada or BP Australia, as the case may be,
will not have to pay additional amounts under any of the following
circumstances:
o The U.S. government or any political subdivision of the U.S.
government is the entity that is imposing the tax or
governmental charge.
o The tax or governmental charge is imposed due to the
presentation of a debt security, if presentation is required,
for payment on a date more than 30 days after the security
became due or after the payment was provided for.
o The tax or governmental charge is on account of an estate,
inheritance, gift, sale, transfer, personal property or
similar tax or other governmental charge.
14
o The tax or governmental charge is for a tax or governmental
charge that is payable in a manner that does not involve
withholdings.
o The tax or governmental charge is imposed or withheld because
the holder or beneficial owner failed:
o to provide information about the nationality,
residence or identity of the holder or beneficial
owner, or
o to make a declaration or satisfy any information
requirements,
that the statutes, treaties, regulations or administrative
practices of the taxing jurisdiction require as a precondition
to exemption from all or part of such tax or governmental
charge.
o The withholding or deduction is imposed pursuant to any
European Union Directive on the taxation of savings
implementing the conclusions of the ECOFIN Council meeting of
November 26 and 27, 2000, or any law implementing such
directive.
o The withholding or deduction is imposed on a holder or
beneficial owner who could have avoided such withholding or
deduction by presenting its debt securities to another paying
agent.
o The holder is a fiduciary or partnership or an entity that is
not the sole beneficial owner of the payment of the principal
of, or any interest on, any security, and the laws of the
jurisdiction require the payment to be included in the income
of a beneficiary or settlor for tax purposes with respect to
such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such additional
amounts had it been the holder of such security.
In addition, BP Canada will not have to pay additional amounts under
either of the following circumstances:
o The debt security is presented for payment by, or by a third
party on behalf of, a holder in respect of whom such taxes or
duties are required to be withheld or deducted by reason of
the holder being a person with whom BP Canada or BP are not
dealing at arm's length (within the meaning of the Income Tax
Act (Canada)).
o The debt security is presented for payment by, or by a third
party on behalf of, a holder in respect of whom such taxes or
duties would not have been imposed but for the failure of the
holder to comply with any requirement under relevant income
tax treaties or Canadian statutes and regulations (or any
administrative practice in Canada) to claim or establish
entitlement to exemption from or reduction of such taxes or
duties.
In addition, BP Australia will not have to pay additional amounts
payable if the holder is an associate of BP Australia for the purposes of
section 128F of the Income Tax Assessment Act 1936 of Australia.
These provisions will also apply to any taxes or governmental charges
imposed by any jurisdiction in which a successor to BP is organized. The
prospectus supplement relating to the debt securities may describe additional
circumstances in which BP would not be required to pay additional amounts.
(Section 1010)
Optional Tax Redemption
We may also have the option to redeem the debt securities of a given
series if, as a result of any change in United Kingdom, Canadian or Australia
tax treatment, BP, BP Capital U.K., BP Canada or BP Australia would be required
to pay additional amounts as described above under "--Payment of Additional
Amounts". This option applies only in the case of changes in United Kingdom,
Canadian or Australian tax treatment that occur on or after the date specified
in the prospectus supplement for the applicable series of debt securities. The
redemption price for
15
the debt securities, other than original issue discount debt securities, will be
equal to the principal amount of the debt securities being redeemed plus accrued
interest. The redemption price for original issue discount debt securities will
be specified in the prospectus supplement for such securities. (Section 1108)
Event Risk Provisions
The debt securities do not contain event risk provisions designed to
require BP or the BP Debt Issuers to redeem the debt securities, reset the
interest rate or take other actions in response to highly leveraged
transactions, changes in credit ratings or similar occurrences.
Defeasance and Discharge
The following discussion of full defeasance and discharge will be
applicable to your series of debt securities only if we choose to have them
apply to that series. If we do so choose, we will state that in the prospectus
supplement. (Section 403)
We can legally release ourselves from any payment or other obligations
on the debt securities, except for various obligations described below, if we,
in addition to other actions, put in place the following arrangements for you to
be repaid:
o We must deposit in trust for your benefit and the benefit of
all other direct holders of the debt securities a combination
of money and U.S. government or U.S. government agency notes
or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on
their various due dates. In addition, on the date of such
deposit, we must not be in default. For purposes of this
no-default test, a default would include an event of default
that has occurred and not been cured, as described below under
"Default and Related Matters--Events of Default--What is An
Event of Default?" A default for this purpose would also
include any event that would be an event of default if the
requirements for giving us default notice or our default
having to exist for a specific period of time were
disregarded.
o We must deliver to the trustee a legal opinion of our counsel
confirming that under current U.S. federal income tax law we
may make the above deposit without causing you to be taxed on
the debt securities any differently than if we did not make
the deposit and just repaid the debt securities ourselves. In
the case of debt securities being discharged, we must deliver
along with this opinion a private letter ruling from U.S.
Internal Revenue Service to this effect or a revenue ruling
pertaining to a comparable form of transaction to that effect
published by the U.S. Internal Revenue Service to the same
effect.
o If the debt securities are listed on the New York Stock
Exchange, we must deliver to the trustee a legal opinion of
our counsel confirming that the deposit, defeasance and
discharge will not cause the debt securities to be delisted.
However, even if we take these actions, a number of our obligations
relating to the debt securities will remain. These include the following
obligations:
o to register the transfer and exchange of debt securities;
o to replace mutilated, destroyed, lost or stolen debt
securities;
o to maintain paying agencies; and
o to hold money for payment in trust.
Default and Related Matters
16
Ranking
The debt securities are not secured by any of our property or assets.
Accordingly, your ownership of debt securities means you are one of our
unsecured creditors. The debt securities are not subordinated to any of our
other debt obligations and therefore they rank equally with all our other
unsecured and unsubordinated indebtedness.
Events of Default
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
What Is an Event of Default? The term event of default means any of the
following:
o We do not pay the principal or any premium on a debt security
at maturity.
o We do not pay interest on a debt security within 30 days of
its due date.
o We do not deposit any sinking fund payment on its due date.
o We remain in breach of a covenant or any other term of the
indentures for 90 days after we receive a notice of default
stating we are in breach. The notice must be sent by either
the trustee or holders of 25% of the principal amount of debt
securities of the affected series.
o We file for bankruptcy or certain other events in bankruptcy,
insolvency or reorganization occur.
o Any other event of default described in the prospectus
supplement occurs. (Section 501)
Remedies If an Event of Default Occurs. If an event of default has
occurred and has not been cured, the trustee or the holders of 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity. A
declaration of acceleration of maturity may be canceled by the holders of at
least a majority in principal amount of the debt securities of the affected
series if certain conditions are met. (Section 502)
Except in cases of default, where the trustee has some special duties,
the trustee is not required to take any action under the indenture at the
request of any holders unless the holders offer the trustee reasonable
protection from expenses and liability. This protection is called an indemnity.
(Section 603) If reasonable indemnity is provided, the holders of a majority in
principal amount of the outstanding debt securities of the relevant series may
direct the time, method and place of conducting any lawsuit or other formal
legal action seeking any remedy available to the trustee. These majority holders
may also direct the trustee in performing any other action under the indenture.
(Section 512)
Before you bypass the trustee and bring your own lawsuit or other
formal legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
o You must give the trustee written notice that an event of
default has occurred and remains uncured.
o The holders of 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that
the trustee take action because of the default, and must
offer reasonable indemnity to the trustee against the cost and other
liabilities of taking that action.
o The trustee must have not taken action for 60 days after receipt of the
above notice and offer of indemnity. (Section 507)
17
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Street name and other indirect holders should consult their banks or brokers for
information on how to give notice or direction to or make a request of the
trustee and to make or cancel a declaration of acceleration.
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We will furnish to the trustee every year a written statement of
certain of our officers certifying that, to their knowledge, we are in
compliance with the indenture and the debt securities, or else specifying any
default. (Section 1008)
Regarding the Trustee
BP and several of its subsidiaries maintain banking relations with the
trustee group of companies in the ordinary course of their business.
If an event of default occurs, or an event occurs that would be an
event of default if the requirements for giving us default notice or our default
having to exist for a specific period of time were disregarded, the trustee may
be considered to have a conflicting interest with respect to the debt securities
or the applicable indenture for purposes of the Trust Indenture Act of 1939. In
that case, the trustee may be required to resign as trustee under the applicable
indenture and we would be required to appoint a successor trustee.
CLEARANCE AND SETTLEMENT
Securities we issue may be held through one or more international and
domestic clearing systems. The principal clearing systems we will use are the
book-entry systems operated by DTC in the United States, Clearstream Banking,
societe anonyme, in Luxembourg ("Clearstream, Luxembourg") and Euroclear Bank
S.A./N.V. in Brussels, Belgium ("Euroclear"). These systems have established
electronic securities and payment transfer, processing, depositary and custodial
links among themselves and others, either directly or through custodians and
depositaries. These links allow securities to be issued, held and transferred
among the clearing systems without the physical transfer of certificates.
Special procedures to facilitate clearance and settlement have been
established among these clearing systems to trade securities across borders in
the secondary market. Where payments for securities we issue in global form will
be made in U.S. dollars, these procedures can be used for cross-market transfers
and the securities will be cleared and settled on a delivery against payment
basis.
Cross-market transfers of securities that are not in global form may be
cleared and settled in accordance with other procedures that may be established
among the clearing systems for these securities. Investors in securities that
are issued outside of the United States, its territories and possessions must
initially hold their interests through Euroclear, Clearstream, Luxembourg or the
clearance system that is described in the applicable prospectus supplement.
The policies of DTC, Clearstream, Luxembourg and Euroclear will govern
payments, transfers, exchange and other matters relating to the investor's
interest in securities held by them. This is also true for any other clearance
system that may be named in a prospectus supplement.
We have no responsibility for any aspect of the actions of DTC,
Clearstream, Luxembourg or Euroclear or any of their direct or indirect
participants. We have no responsibility for any aspect of the records kept by
DTC, Clearstream, Luxembourg or Euroclear or any of their direct or indirect
participants. We also do not supervise these systems in any way. This is also
true for any other clearing system indicated in a prospectus supplement.
DTC, Clearstream, Luxembourg and Euroclear and their participants
perform these clearance and settlement functions under agreements they have made
with one another or with their customers. You should be aware that they are not
obligated to perform these procedures and may modify them or discontinue them at
any time.
The description of the clearing systems in this section reflects our
understanding of the rules and procedures of DTC, Clearstream, Luxembourg and
Euroclear as they are currently in effect. Those systems could change their
rules and procedures at any time.
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The Clearing Systems
DTC
DTC has advised us as follows:
o DTC is:
o a limited purpose trust company organized under the
laws of the State of New York;
o a member of the Federal Reserve System;
o a "clearing corporation" within the meaning of the
Uniform Commercial Code; and
o a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange
Act of 1934.
o DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities
transactions between participants through electronic
book-entry changes to accounts of its participants. This
eliminates the need for physical movement of certificates.
o Participants in DTC include securities brokers and dealers,
banks, trust companies and clearing corporations and may
include certain other organizations. DTC is partially owned by
some of these participants or their representatives.
o Indirect access to the DTC system is also available to banks,
brokers, dealers and trust companies that have relationships
with participants.
o The rules applicable to DTC and DTC participants are on file
with the SEC.
Clearstream, Luxembourg
Clearstream, Luxembourg has advised us as follows:
o Clearstream, Luxembourg is a duly licensed bank organized as a
societe anonyme incorporated under the laws of Luxembourg and
is subject to regulation by the Luxembourg Commission for the
Supervision of the Financial Sector (Commission de
Surveillance du Secteur Financier).
o Clearstream, Luxembourg holds securities for its customers and
facilitates the clearance and settlement of securities
transactions among them. It does so through electronic
book-entry changes to the accounts of its customers. This
eliminates the need for physical movement of certificates.
o Clearstream, Luxembourg provides other services to its
participants, including safekeeping, administration, clearance
and settlement of internationally traded securities and
lending and borrowing of securities. It interfaces with the
domestic markets in over 30 countries through established
depositary and custodial relationships.
o Clearstream, Luxembourg's customers include worldwide
securities brokers and dealers, banks, trust companies and
clearing corporations and may include professional financial
intermediaries. Its U.S. customers are limited to securities
brokers and dealers and banks.
o Indirect access to the Clearstream, Luxembourg system is also
available to others that clear through Clearstream, Luxembourg
customers or that have custodial relationships with its
customers, such as banks, brokers, dealers and trust
companies.
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Euroclear
Euroclear has advised us as follows:
o Euroclear is incorporated under the laws of Belgium as a bank
and is subject to regulation by the Belgian Banking and
Finance Commission (Commission Bancaire et Financiere) and the
National Bank of Belgium (Banque Nationale de Belgique).
o Euroclear holds securities for its customers and facilitates
the clearance and settlement of securities transactions among
them. It does so through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for
physical movement of certificates.
o Euroclear provides other services to its customers, including
credit custody, lending and borrowing of securities and
tri-party collateral management. It interfaces with the
domestic markets of several other countries.
o Euroclear customers include banks, including central banks,
securities brokers and dealers, trust companies and clearing
corporations and may include certain other professional
financial intermediaries.
o Indirect access to the Euroclear system is also available to
others that clear through Euroclear customers or that have
relationships with Euroclear customers.
o All securities in Euroclear are held on a fungible basis. This
means that specific certificates are not matched to specific
securities clearance accounts.
Other Clearing Systems
We may choose any other clearing system for a particular series of
securities. The clearance and settlement procedures for the clearing system we
choose will be described in the applicable prospectus supplement.
Primary Distribution
The distribution of the securities will be cleared through one or more
of the clearing systems that we have described above or any other clearing
system that is specified in the applicable prospectus supplement. Payment for
securities will be made on a delivery versus payment or free delivery basis.
These payment procedures will be more fully described in the applicable
prospectus supplement.
Clearance and settlement procedures may vary from one series of
securities to another according to the currency that is chosen for the specific
series of securities. Customary clearance and settlement procedures are
described below.
We will submit applications to the relevant system or systems for the
securities to be accepted for clearance. The clearance numbers that are
applicable to each clearance system will be specified in the prospectus
supplement.
Clearance and Settlement Procedures -- DTC
DTC participants that hold securities through DTC on behalf of
investors will follow the settlement practices applicable to United States
corporate debt obligations in DTC's Same-Day Funds Settlement System, or such
other procedures as are applicable for other securities.
Securities will be credited to the securities custody accounts of these
DTC participants against payment in same-day funds, for payments in U.S.
dollars, on the settlement date. For payments in a currency other than U.S.
dollars, securities will be credited free of payment on the settlement date.
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Clearance and Settlement Procedures -- Euroclear and Clearstream,
Luxembourg
We understand that investors that hold their securities through
Euroclear or Clearstream, Luxembourg accounts will follow the settlement
procedures that are applicable to conventional Eurobonds in registered form for
debt securities, or such other procedures as are applicable for other
securities.
Securities will be credited to the securities custody accounts of
Euroclear and Clearstream, Luxembourg participants on the business day following
the settlement date, for value on the settlement date. They will be credited
either free of payment or against payment for value on the settlement date.
Secondary Market Trading
Trading between DTC Participants
Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC's rules. Secondary market trading will be
settled using procedures applicable to United States corporate debt obligations
in DTC's Same-Day Funds Settlement System for debt securities, or such other
procedures as are applicable for other securities.
If payment is made in U.S. dollars, settlement will be in same-day
funds. If payment is made in a currency other than U.S. dollars, settlement will
be free of payment. If payment is made other than in U.S. dollars, separate
payment arrangements outside of the DTC system must be made between the DTC
participants involved.
Trading between Euroclear and/or Clearstream, Luxembourg Participants
We understand that secondary market trading between Euroclear and/or
Clearstream, Luxembourg participants will occur in the ordinary way following
the applicable rules and operating procedures of Euroclear and Clearstream,
Luxembourg. Secondary market trading will be settled using procedures applicable
to conventional Eurobonds in registered form for debt securities, or such other
procedures as are applicable for other securities.
Trading between a DTC Seller and a Euroclear or Clearstream, Luxembourg
Purchaser
A purchaser of securities that are held in the account of a DTC
participant must send instructions to Euroclear or Clearstream, Luxembourg at
least one business day prior to settlement. The instructions will provide for
the transfer of the securities from the selling DTC participant's account to the
account of the purchasing Euroclear or Clearstream, Luxembourg participant.
Euroclear or Clearstream, Luxembourg, as the case may be, will then instruct the
common depositary for Euroclear and Clearstream, Luxembourg to receive the
securities either against payment or free of payment.
The interests in the securities will be credited to the respective
clearing system. The clearing system will then credit the account of the
participant, following its usual procedures. Credit for the securities will
appear on the next day, European time. Cash debit will be back-valued to, and
the interest on the securities will accrue from, the value date, which would be
the preceding day, when settlement occurs in New York. If the trade fails and
settlement is not completed on the intended date, the Euroclear or Clearstream,
Luxembourg cash debit will be valued as of the actual settlement date instead.
Euroclear participants or Clearstream, Luxembourg participants will
need the funds necessary to process same-day funds settlement. The most direct
means of doing this is to preposition funds for settlement, either from cash or
from existing lines of credit, as for any settlement occurring within Euroclear
or Clearstream, Luxembourg. Under this approach, participants may take on credit
exposure to Euroclear or Clearstream, Luxembourg until the securities are
credited to their accounts one business day later.
As an alternative, if Euroclear or Clearstream, Luxembourg has extended
a line of credit to them, participants can choose not to preposition funds and
will instead allow that credit line to be drawn upon to finance settlement.
Under this procedure, Euroclear participants or Clearstream, Luxembourg
participants purchasing
21
securities would incur overdraft charges for one business day (assuming they
cleared the overdraft as soon as the securities were credited to their
accounts). However, interest on the securities would accrue from the value date.
Therefore, in many cases, the investment income on securities that is earned
during that one business day period may substantially reduce or offset the
amount of the overdraft charges. This result will, however, depend on each
participant's particular cost of funds.
Because the settlement will take place during New York business hours,
DTC participants will use their usual procedures to deliver securities to the
depositary on behalf of Euroclear participants or Clearstream, Luxembourg
participants. The sale proceeds will be available to the DTC seller on the
settlement date. For the DTC participants, then, a cross-market transaction will
settle no differently than a trade between two DTC participants.
Special Timing Considerations
You should be aware that investors will only be able to make and
receive deliveries, payments and other communications involving the securities
through Clearstream, Luxembourg and Euroclear on days when those systems are
open for business. Those systems may not be open for business on days when
banks, brokers and other institutions are open for business in the United
States.
In addition, because of time-zone differences, there may be problems
with completing transactions involving Clearstream, Luxembourg and Euroclear on
the same business day as in the United States. U.S. investors who wish to
transfer their interests in the securities, or to receive or make a payment or
delivery of the securities, on a particular day, may find that the transactions
will not be performed until the next business day in Luxembourg or Brussels,
depending on whether Clearstream, Luxembourg or Euroclear is used.
TAX CONSIDERATIONS
United States Taxation
This section describes the material United States federal income tax
consequences of owning the debt securities described in this prospectus. It
applies to you only if you acquire debt securities in the offering or offerings
contemplated by this prospectus and you hold your debt securities as capital
assets for tax purposes. This section is the opinion of Sullivan & Cromwell, our
U.S. counsel. This section does not apply to you if you are a member of a class
of holders subject to special rules, such as:
o a dealer in securities or currencies;
o a trader in securities that elects to use a mark-to-market
method of accounting for your securities holdings;
o a bank;
o a life insurance company;
o a tax-exempt organization;
o a person that owns debt securities that are a hedge or that
are hedged against interest rate or currency risks;
o a person that owns debt securities as part of a straddle or
conversion transaction for tax purposes; or
o a person whose functional currency for tax purposes is not the
U.S. dollar.
This section deals only with debt securities that are due to mature 30
years or less from the date on which they are issued. The United States federal
income tax consequences of owning debt securities that are due to mature
22
more than 30 years from their date of issue will be discussed in an applicable
prospectus supplement. This section is based on the Internal Revenue Code of
1986, as amended, which we refer to in this discussion as the Code, its
legislative history, existing and proposed regulations under the Code, published
rulings and court decisions, all as currently in effect. These laws are subject
to change, possibly on a retroactive basis.
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Please consult your own tax advisor concerning the consequences of owning these
debt securities in your particular circumstances under the Code and the laws of
any other taxing jurisdiction.
- --------------------------------------------------------------------------------
United States Holders
This subsection describes the tax consequences to a "United States
holder". A United States holder is a beneficial owner of a debt security that
is:
o a citizen or resident of the United States;
o a domestic corporation;
o an estate whose income is subject to United States federal
income tax regardless of its source; or
o a trust if a United States court can exercise primary
supervision over the trust's administration and one or more
United States persons are authorized to control all
substantial decisions of the trust.
If you are not a United States holder, this subsection does not apply to you,
and you should see the sections entitled "United States Alien Holders (BP
Capital America)" and "United States Alien Holders (BP Capital U.K., BP Canada
or BP Australia)" below for information that may apply to you.
Payments of Interest. Except as described below in the case of interest
on a "discount debt security" that is not "qualified stated interest", each as
defined below under "Original Issue Discount--General", you will be taxed on any
interest on your debt security, whether payable in U.S. dollars or a currency,
composite currency or basket of currencies other than U.S. dollars, as ordinary
income at the time you receive the interest or at the time it accrues, depending
on your method of accounting for tax purposes. We refer to a currency, composite
currency or basket of currencies other than U.S. dollars as foreign currency
throughout this subsection.
Interest paid on, and original issue discount (as described below under
"Original Issue Discount"), if any, accrued with respect to the debt securities
that are issued by BP Capital U.K., BP Canada or BP Australia constitutes income
from sources outside the United States, but, with certain exceptions, will be
"passive" or "financial services" income, which is treated separately from other
types of income for purposes of computing the foreign tax credit allowable to a
United States Holder. Interest paid on, and original issue discount (as
described below under "Original Issue Discount"), if any, accrued with respect
to the debt securities that are issued by BP Capital America constitutes income
from sources within the United States, but, with certain exceptions, will be
"passive" or "financial services" income, which is treated separately from other
types of income for purposes of computing the foreign tax credit allowable to a
United States Holder.
Cash Basis Taxpayers. If you are a taxpayer that uses the "cash
receipts and disbursements" method of accounting for tax purposes and you
receive an interest payment that is denominated in, or determined by reference
to, a foreign currency, you must recognize income equal to the U.S. dollar value
of the interest payment, based on the exchange rate in effect on the date of
receipt, regardless of whether you actually convert the payment into U.S.
dollars.
Accrual Basis Taxpayers. If you are a taxpayer that uses the accrual
method of accounting for tax purposes, you may determine the amount of income
that you recognize with respect to an interest payment denominated in, or
determined by reference to, a foreign currency by using one of two methods.
Under the first method, you will determine the amount of income accrued based on
the average exchange rate in effect during the interest accrual period (or, with
respect to an accrual period that spans two taxable years, that part of the
period within the taxable year).
23
If you elect the second method, you would determine the amount of
income accrued on the basis of the exchange rate in effect on the last day of
the accrual period (or, in the case of an accrual period that spans two taxable
years, the exchange rate in effect on the last day of the part of the period
within the taxable year). Additionally, under this second method, if you receive
a payment of interest within five business days of the last day of your accrual
period or taxable year, you may instead translate the interest accrued into U.S.
dollars at the exchange rate in effect on the day that you actually receive the
interest payment. If you elect the second method it will apply to all debt
instruments that you hold at the beginning of the first taxable year to which
the election applies and to all debt instruments that you thereafter acquire.
You may not revoke this election without the consent of the Internal Revenue
Service.
When you actually receive an interest payment, including a payment
attributable to accrued but unpaid interest upon the sale or retirement of your
debt security, denominated in, or determined by reference to, a foreign currency
for which you accrued an amount of income, you will recognize ordinary income or
loss measured by the difference, if any, between the exchange rate that you used
to accrue interest income and the exchange rate in effect on the date of
receipt, regardless of whether you actually convert the payment into U.S.
dollars.
Original Issue Discount -- General. If you own a debt security, other
than a debt security with a term of one year or less, referred to as a
"short-term debt security", it will be treated as issued at an original issue
discount, referred to as a "discount debt security", if the debt security's
"stated redemption price at maturity" exceeds its "issue price" by more than a
"de minimis amount". All three terms are defined below. Generally, a debt
security's "issue price" will be the first price at which a substantial amount
of debt securities included in the issue of which the debt security is a part
are sold to persons other than bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers. A debt security's "stated redemption price at maturity" is the
total of all payments provided by the debt security that are not payments of
"qualified stated interest". Generally, an interest payment on a debt security
is "qualified stated interest" if it is part of a series of stated interest
payments on a debt security that are unconditionally payable at least annually
at a single fixed rate (with certain exceptions for lower rates paid during some
periods) applied to the outstanding principal amount of the debt security. There
are special rules for "variable rate debt securities" that we discuss below
under "Variable Rate Debt Securities".
In general, your debt security is not a discount debt security if the
amount by which its "stated redemption price at maturity" exceeds its "issue
price" is less than the de minimis amount of 1/4 of 1 percent of its stated
redemption price at maturity multiplied by the number of complete years to its
maturity, referred to as the "de minimis amount". Your debt security will have
"de minimis original issue discount" if the amount of the excess is less than
the de minimis amount. If your debt security has "de minimis original issue
discount", you must include it in income as stated principal payments are made
on the debt security, unless you make the election described below under
"Election to Treat All Interest as Original Issue Discount". You can determine
the includible amount with respect to each such payment by multiplying the total
amount of your debt security's de minimis original issue discount by a fraction
equal to:
o the amount of the principal payment made
divided by:
o the stated principal amount of the debt security.
Inclusion of Original Issue Discount in Income. Generally, if your
discount debt security matures more than one year from its date of issue, you
must include original issue discount, referred to as "OID", in income before you
receive cash attributable to that income. The amount of OID that you must
include in income is calculated using a constant-yield method, and generally you
will include increasingly greater amounts of OID in income over the life of your
discount debt security. More specifically, you can calculate the amount of OID
that you must include in income by adding the daily portions of OID with respect
to your discount debt security for each day during the taxable year or portion
of the taxable year that you hold your discount debt security, referred to as
"accrued OID". You can determine the daily portion by allocating to each day in
any "accrual period" a pro rata portion of the OID allocable to that accrual
period. You may select an accrual period of any length with respect to your
discount debt
24
security and you may vary the length of each accrual period over the term of
your discount debt security. However, no accrual period may be longer than one
year and each scheduled payment of interest or principal on your discount debt
security must occur on either the first or final day of an accrual period.
You can determine the amount of OID allocable to an accrual period by:
o multiplying your discount debt security's adjusted issue price
at the beginning of the accrual period by your debt security's
yield to maturity, and then
o subtracting from this figure the sum of the payments of
qualified stated interest on your debt security allocable to
the accrual period.
You must determine the discount debt security's yield to maturity on
the basis of compounding at the close of each accrual period and adjusting for
the length of each accrual period. Further, you determine your discount debt
security's adjusted issue price at the beginning of any accrual period by:
o adding your discount debt security's issue price and any
accrued OID for each prior accrual period, and then
o subtracting any payments previously made on your discount debt
security that were not qualified stated interest payments.
If an interval between payments of qualified stated interest on your
discount debt security contains more than one accrual period, then, when you
determine the amount of OID allocable to an accrual period, you must allocate
the amount of qualified stated interest payable at the end of the interval
(including any qualified stated interest that is payable on the first day of the
accrual period immediately following the interval) pro rata to each accrual
period in the interval based on their relative lengths. In addition, you must
increase the adjusted issue price at the beginning of each accrual period in the
interval by the amount of any qualified stated interest that has accrued prior
to the first day of the accrual period but that is not payable until the end of
the interval. You may compute the amount of OID allocable to an initial short
accrual period by using any reasonable method if all other accrual periods,
other than a final short accrual period, are of equal length.
The amount of OID allocable to the final accrual period is equal to the
difference between:
o the amount payable at the maturity of your debt security
(other than any payment of qualified stated interest); and
o your debt security's adjusted issue price as of the beginning
of the final accrual period.
Acquisition Premium. If you purchase your debt security for an amount
that is less than or equal to the sum of all amounts (other than qualified
stated interest) payable on your debt security after the purchase date but is
greater than the amount of your debt security's adjusted issue price (as
determined above under "General"), the excess is "acquisition premium". If you
do not make the election described below under "Election to Treat All Interest
as Original Issue Discount", then you must reduce the daily portions of OID by a
fraction equal to:
o the excess of your adjusted basis in the debt security
immediately after purchase over the adjusted issue price of
your debt security
divided by:
o the excess of the sum of all amounts payable (other than
qualified stated interest) on your debt security after the
purchase date over your debt security's adjusted issue price.
25
Pre-Issuance Accrued Interest. An election can be made to decrease the
issue price of your debt security by the amount of pre-issuance accrued interest
if:
o a portion of the initial purchase price of your debt security
is attributable to pre-issuance accrued interest;
o the first stated interest payment on your debt security is to
be made within one year of your debt security's issue date;
and
o the payment will equal or exceed the amount of pre-issuance
accrued interest.
If this election is made, a portion of the first stated interest
payment will be treated as a return of the excluded pre-issuance accrued
interest and not as an amount payable on your debt security.
Debt Securities Subject to Contingencies Including Optional Redemption.
Your debt security is subject to a contingency if it provides for an alternative
payment schedule or schedules applicable upon the occurrence of a contingency or
contingencies (other than a remote or incidental contingency), whether such
contingency relates to payments of interest or of principal. In such a case, you
must determine the yield and maturity of your debt security by assuming that the
payments will be made according to the payment schedule most likely to occur if:
o the timing and amounts of the payments that comprise each
payment schedule are known as of the issue date, and
o one of such schedules is significantly more likely than not to
occur.
If there is no single payment schedule that is significantly more
likely than not to occur (other than because of a mandatory sinking fund), you
must include income on your debt security in accordance with the general rules
that govern contingent payment obligations. These rules will be discussed in the
applicable prospectus supplement.
Notwithstanding the general rules for determining yield and maturity,
if your debt security is subject to contingencies, and either you or the issuer
have an unconditional option or options that, if exercised, would require
payments to be made on the debt security under an alternative payment schedule
or schedules, then:
o in the case of an option or options that the issuer may
exercise, the issuer will be deemed to exercise or not
exercise an option or combination of options in the manner
that minimizes the yield on your debt security; and
o in the case of an option or options that you may exercise, you
will be deemed to exercise or not exercise an option or
combination of options in the manner that maximizes the yield
on your debt security.
If both you and the issuer hold options described in the preceding
sentence, those rules will apply to each option in the order in which they may
be exercised. You may determine the yield on your debt security for the purposes
of those calculations by using any date on which your debt security may be
redeemed or repurchased as the maturity date and the amount payable on the date
that you chose in accordance with the terms of your debt security as the
principal amount payable at maturity.
If a contingency (including the exercise of an option) actually occurs
or does not occur contrary to an assumption made according to the above rules,
referred to as a "change in circumstances", then, except to the extent that a
portion of your debt security is repaid as a result of the change in
circumstances and solely to determine the amount and accrual of OID, you must
redetermine the yield and maturity of your debt security by treating your debt
security as having been retired and reissued on the date of the change in
circumstances for an amount equal to your debt security's adjusted issue price
on that date.
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Election to Treat All Interest as Original Issue Discount. You may
elect to include in gross income all interest that accrues on your debt security
using the constant-yield method described above under the heading "Inclusion of
Original Issue Discount in Income", with the modifications described below. For
purposes of this election, interest will include stated interest, OID, de
minimis original issue discount, market discount, de minimis market discount and
unstated interest, as adjusted by any amortizable bond premium (described below
under "Debt Securities Purchased at a Premium") or acquisition premium.
If you make this election for your debt security, then, when you apply
the constant-yield method:
o the "issue price" of your debt security will equal your cost;
o the issue date of your debt security will be the date you
acquired it; and
o no payments on your debt security will be treated as payments
of qualified stated interest.
Generally, this election will apply only to the debt security for which
you make it; however, if the debt security for which this election is made has
amortizable bond premium, you will be deemed to have made an election to apply
amortizable bond premium against interest for all debt instruments with
amortizable bond premium (other than debt instruments the interest on which is
excludible from gross income) that you hold as of the beginning of the taxable
year in which you acquire the debt security for which you made this election or
which you acquire thereafter. Additionally, if you make this election for a
market discount debt security, you will be treated as having made the election
discussed below under "Market Discount" to include market discount in income
currently over the life of all debt instruments that you currently own or
thereafter acquire. You may not revoke any election to apply the constant-yield
method to all interest on a debt security or the deemed elections with respect
to amortizable bond premium or market discount debt securities without the
consent of the Internal Revenue Service.
Variable Rate Debt Securities. Your debt security will be a "variable
rate debt security" if:
o your debt security's "issue price" does not exceed the total
noncontingent principal payments by more than the lesser of:
o .015 multiplied by the product of the total
noncontingent principal payments and the number of
complete years to maturity from the issue date; or
o 15 percent of the total noncontingent principal
payments; and
o your debt security provides for stated interest (compounded or
paid at least annually) only at:
o one or more "qualified floating rates";
o a single fixed rate and one or more qualified floating
rates;
o a single "objective rate"; or
o a single fixed rate and a single objective rate that
is a "qualified inverse floating rate".
Your debt security will have a variable rate that is a "qualified
floating rate" if:
o variations in the value of the rate can reasonably be expected
to measure contemporaneous variations in the cost of newly
borrowed funds in the currency in which your debt security is
denominated; or
27
o the rate is equal to such a rate multiplied by either:
o a fixed multiple that is greater than 0.65 but not
more than 1.35; or
o a fixed multiple greater than 0.65 but not more than
1.35, increased or decreased by a fixed rate; and
o the value of the rate on any date during the term of your debt
security is set no earlier than 3 months prior to the first
day on which that value is in effect and no later than 1 year
following that first day.
If your debt security provides for two or more qualified floating rates
that are within 0.25 percentage points of each other on the issue date or can
reasonably be expected to have approximately the same values throughout the term
of the debt security, the qualified floating rates together constitute a single
qualified floating rate.
Your debt security will not have a qualified floating rate, however, if
the rate is subject to certain restrictions, including caps, floors, governors,
or other similar restrictions, unless such restrictions are fixed throughout the
term of the debt security or are not reasonably expected to significantly affect
the yield on the debt security.
Your debt security will have a variable rate that is a single
"objective rate" if:
o the rate is not a qualified floating rate;
o the rate is determined using a single, fixed formula that is
based on objective financial or economic information that is
not within the control of or unique to the circumstances of
the issuer or a related party; and
o the value of the rate on any date during the term of your debt
security is set no earlier than 3 months prior to the first
day on which that value is in effect and no later than 1 year
following that first day.
Your debt security will not have a variable rate that is an objective
rate, however, if it is reasonably expected that the average value of the rate
during the first half of your debt security's term will be either significantly
less than or significantly greater than the average value of the rate during the
final half of your debt security's term.
An objective rate as described above is a "qualified inverse floating
rate" if:
o the rate is equal to a fixed rate minus a qualified floating
rate; and
o the variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the cost of
newly borrowed funds.
Your debt security will also have a single qualified floating rate or
an objective rate if interest on your debt security is stated at a fixed rate
for an initial period of one year or less followed by either a qualified
floating rate or an objective rate for a subsequent period, and either:
o the fixed rate and the qualified floating rate or objective
rate have values on the issue date of the debt security that
do not differ by more than 0.25 percentage points; or
o the value of the qualified floating rate or objective rate is
intended to approximate the fixed rate.
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In general, if your variable rate debt security provides for stated
interest at a single qualified floating rate or objective rate, all stated
interest on your debt security is qualified stated interest. In this case, the
amount of OID, if any, is determined by using, in the case of a qualified
floating rate or qualified inverse floating rate, the value as of the issue date
of the qualified floating rate or qualified inverse floating rate, or, in the
case of any other objective rate, a fixed rate that reflects the yield
reasonably expected for your debt security.
If your variable rate debt security does not provide for stated
interest at a single qualified floating rate or a single objective rate, and
also does not provide for interest payable at a fixed rate, other than at a
single fixed rate for an initial period, you generally must determine the
interest and OID accruals on your debt security by:
o determining a fixed rate substitute for each variable rate
provided under your variable rate debt security;
o constructing the equivalent fixed rate debt instrument, using
the fixed rate substitute described above;
o determining the amount of qualified stated interest and OID
with respect to the equivalent fixed rate debt instrument; and
o adjusting for actual variable rates during the applicable
accrual period.
When you determine the fixed rate substitute for each variable rate
provided under the variable rate debt security, you generally will use the value
of each variable rate as of the issue date or, for an objective rate that is not
a qualified inverse floating rate, a rate that reflects the reasonably expected
yield on your debt security.
If your variable rate debt security provides for stated interest either
at one or more qualified floating rates or at a qualified inverse floating rate,
and also provides for stated interest at a single fixed rate, other than at a
single fixed rate for an initial period, you generally must determine interest
and OID accruals by using the method described in the previous paragraph.
However, your variable rate debt security will be treated, for purposes of the
first three steps of the determination, as if your debt security had provided
for a qualified floating rate, or a qualified inverse floating rate, rather than
the fixed rate. The qualified floating rate, or qualified inverse floating rate,
that replaces the fixed rate must be such that the fair market value of your
variable rate debt security as of the issue date approximates the fair market
value of an otherwise identical debt instrument that provides for the qualified
floating rate, or qualified inverse floating rate, rather than the fixed rate.
Short-Term Debt Securities. In general, if you are an individual or
other cash basis United States holder of a short-term debt security, you are not
required to accrue OID (as specially defined below for the purposes of this
paragraph) for U.S. federal income tax purposes unless you elect to do so.
However, you may be required to include any stated interest in income as you
receive it. If you are an accrual basis taxpayer, a taxpayer in a special class,
including, but not limited to, a regulated investment company, common trust
fund, or a certain type of pass through entity, or a cash basis taxpayer who so
elects, you will be required to accrue OID on short-term debt securities on
either a straight-line basis or under the constant-yield method, based on daily
compounding. If you are not required and do not elect to include OID in income
currently, any gain you realize on the sale or retirement of your short-term
debt security will be ordinary income to the extent of the OID accrued on a
straight-line basis, unless you make an election to accrue the OID under the
constant-yield method, through the date of sale or retirement. However, if you
are not required and do not elect to accrue OID on your short-term debt
securities, you will be required to defer deductions for interest on borrowings
allocable to your short-term debt securities in an amount not exceeding the
deferred income until the deferred income is realized.
When you determine the amount of OID subject to these rules, you must
include all interest payments on your short-term debt security, including stated
interest, in your short-term debt security's stated redemption price at
maturity.
Foreign Currency Discount Debt Securities. You must determine OID for
any accrual period on your discount debt security if it is denominated in, or
determined by reference to, a foreign currency in the foreign
29
currency and then translate the amount of OID into U.S. dollars in the same
manner as stated interest accrued by an accrual basis United States holder, as
described under "Payments of Interest". You may recognize ordinary income or
loss when you receive an amount attributable to OID in connection with a payment
of interest or the sale or retirement of your debt security.
Market Discount
You will be treated as if you purchased your debt security, other than
a short-term debt security, at a market discount and your debt security will be
a "market discount debt security" if:
o you purchase your debt security for less than its issue price
(as determined above under "Original Issue Discount--
General"); and
o your debt security's stated redemption price at maturity or,
in the case of a discount debt security, the debt security's
"revised issue price", exceeds the price you paid for your
debt security by at least 1/4 of 1 percent of your debt
security's stated redemption price at maturity or revised
issue price, respectively, multiplied by the number of
complete years to the debt security's maturity.
To determine the "revised issue price" of your debt security for these
purposes, you generally add any OID that has accrued on your debt security to
its "issue price".
If your debt security's stated redemption price at maturity or, in the
case of a discount debt security, its "revised issue price", does not exceed the
price you paid for the debt security by 1/4 of 1 percent multiplied by the
number of complete years to the debt security's maturity, the excess constitutes
"de minimis market discount", and the rules that we discuss below are not
applicable to you.
If you recognize gain on the maturity or disposition of your market
discount debt security, you must treat it as ordinary income to the extent of
the accrued market discount on your debt security. Alternatively, you may elect
to include market discount in income currently over the life of your debt
security. If you make this election, it will apply to all debt instruments with
market discount that you acquire on or after the first day of the first taxable
year to which the election applies. You may not revoke this election without the
consent of the Internal Revenue Service. You will accrue market discount on your
market discount debt security on a straight-line basis unless you elect to
accrue market discount using a constant-yield method. If you make this election
to accrue market discount using a constant-yield method, it will apply only to
the debt security with respect to which it is made and you may not revoke it.
If you own a market discount debt security and do not elect to include
market discount in income currently, you will generally be required to defer
deductions for interest on borrowings allocable to your debt security in an
amount not exceeding the accrued market discount on your debt security until the
maturity or disposition of your debt security.
Debt Securities Purchased at a Premium. If you purchase your debt
security for an amount in excess of all amounts payable on the debt security
after the acquisition date, other than payments of qualified stated interest,
you may elect to treat the excess as "amortizable bond premium". If you make
this election, you will reduce the amount required to be included in your income
each year with respect to interest on your debt security by the amount of
amortizable bond premium allocable, based on your debt security's yield to
maturity, to that year. If your debt security is denominated in, or determined
by reference to, a foreign currency, you will compute your amortizable bond
premium in units of the foreign currency and your amortizable bond premium will
reduce your interest income in units of the foreign currency. Gain or loss
recognized that is attributable to changes in exchange rates between the time
your amortized bond premium offsets interest income and the time of the
acquisition of your debt security is generally taxable as ordinary income or
loss. If you make an election to amortize bond premium, it will apply to all
debt instruments, other than debt instruments, the interest on which is
excludible from gross income, that you hold at the beginning of the first
taxable year to which the election applies, and to all debt instruments that you
thereafter acquire, and you may not revoke it without the consent of the
Internal Revenue Service. See also "Election to Treat All Interest as Original
Issue Discount".
30
Purchase, Sale and Retirement of the Debt Securities. Your tax basis in
your debt security will generally be the U.S. dollar cost, as defined below, of
your debt security, adjusted by:
o adding any OID or market discount, de minimis original issue
discount and de minimis market discount previously included in
income with respect to your debt security, and then
o subtracting the amount of any payments on your debt security
that are not qualified stated interest payments and the amount
of any amortizable bond premium applied to reduce interest on
your debt security.
If you purchase your debt security with foreign currency, the U.S.
dollar cost of your debt security will generally be the U.S. dollar value of the
purchase price on the date of purchase. However, if you are a cash basis
taxpayer (or an accrual basis taxpayer if you so elect), and your debt security
is traded on an established securities market, as defined in the applicable
Treasury regulations, the U.S. dollar cost of your debt security will be the
U.S. dollar value of the purchase price on the settlement date of your purchase.
You will generally recognize gain or loss on the sale or retirement of
your debt security equal to the difference between the amount you realize on the
sale or retirement and your tax basis in your debt security. If your debt
security is sold or retired for an amount in foreign currency, the amount you
realize will be the U.S. dollar value of such amount on:
o the date payment is received, if you are a cash basis taxpayer
and the debt securities are not traded on an established
securities market, as defined in the applicable Treasury
regulation;
o the date of disposition, if you are an accrual basis taxpayer;
or
o the settlement date for the sale, if you are a cash basis
taxpayer (or an accrual basis United States holder that so
elects) and the debt securities are traded on an established
securities market, as defined in the applicable Treasury
regulation.
You will recognize capital gain or loss when you sell or retire your
debt security, except to the extent:
o attributable to changes in exchange rates as described in the
next paragraph;
o described above under "Original Issue Discount--Short-Term
Debt Securities" or "Original Issue Discount--Market
Discount";
o attributable to accrued but unpaid interest; or
o the rules governing contingent payment obligations apply.
Capital gain of a noncorporate United States holder is generally taxed
at a maximum rate of 20% for property held more than one year and 18% for
property held more than five years.
You must treat any portion of the gain or loss that you recognize on
the sale or retirement of a debt security as ordinary income or loss to the
extent attributable to changes in exchange rates. However, you only take
exchange gain or loss into account to the extent of the total gain or loss you
realize on the transaction.
Exchange of Amounts in Other Than U.S. Dollars. If you receive foreign
currency as interest on your debt security or on the sale or retirement of your
debt security, your tax basis in the foreign currency will equal its U.S. dollar
value when the interest is received or at the time of the sale or retirement. If
you purchase foreign currency, you generally will have a tax basis equal to the
U.S. dollar value of the foreign currency on the date of your purchase. If you
sell or dispose of a foreign currency, including if you use it to purchase debt
securities or exchange it for U.S. dollars, any gain or loss recognized
generally will be ordinary income or loss.
31
Indexed Debt Securities. The applicable prospectus supplement will
discuss any special United States federal income tax rules with respect to debt
securities the payments on which are determined by reference to any index and
other debt securities that are subject to the rules governing contingent payment
obligations which are not subject to the rules governing variable rate debt
securities.
United States Alien Holders (BP Capital America). This subsection
describes the tax consequences to a "United States alien holder" of debt
securities issued by BP Capital America. You are a United States alien holder if
you are the beneficial owner of a debt security and are, for United States
federal income tax purposes:
o a nonresident alien individual;
o a foreign corporation;
o a foreign partnership; or
o an estate or trust that in either case is not subject to
United States federal income tax on a net income basis on
income or gain from a debt security.
If you are a United States holder of debt securities issued by BP
Capital U.K., BP Canada or BP Australia, this subsection does not apply to you.
This discussion assumes that the debt security is not subject to the
rules of Section 871(h)(4)(A) of the Code, which relates to interest payments
that are determined by reference to the income, profits, changes in the value of
property or other attributes of the debtor or a related party.
Under present U.S. federal income and estate tax law, and subject to
the discussion of backup withholding below:
o the issuer and its paying agents will not deduct U.S.
withholding tax from payments of principal, premium, if any,
and interest, including OID, to you if, in the case of
interest,
o you do not actually or constructively own 10% or more
of the total combined voting power of all classes of
stock of the issuer entitled to vote;
o you are not a controlled foreign corporation that is
related to the issuer through stock ownership; and
o the U.S. payor does not have actual knowledge or
reason to know that you are a United States person
and:
a. you have furnished to the U.S. payor an
Internal Revenue Service Form W-8BEN or an
acceptable substitute form upon which you
certify, under penalties of perjury, that you
are a non-United States person,
b. in the case of payments made outside the
United States to you at an offshore account
(generally, an account maintained by you at a
bank or other financial institution at any
location outside the United States), you have
furnished to the U.S. payor documentation
that establishes your identity and your
status as a non-United States person,
c. the U.S. payor has received a withholding
certificate (furnished on an appropriate
Internal Revenue Service Form W-8 or an
acceptable substitute form) from a person
claiming to be:
32
i. a withholding foreign partnership
(generally a foreign partnership
that has entered into an agreement
with the Internal Revenue Service to
assume primary withholding
responsibility with respect to
distributions and guaranteed
payments it makes to its partners),
ii. a qualified intermediary (generally
a non-United States financial
institution or clearing organization
or a non-United States branch or
office of a United States financial
institution or clearing organization
that is a party to a withholding
agreement with the Internal Revenue
Service), or
iii. a U.S. branch of a non-United States
bank or of a non-United States
insurance company,
and the withholding foreign partnership,
qualified intermediary or U.S. branch has
received documentation upon which it may rely
to treat the payment as made to a non-United
States person in accordance with U.S.
Treasury regulations (or, in the case of a
qualified intermediary, in accordance with
its agreement with the Internal Revenue
Service),
d. the U.S. payor receives a statement from a
securities clearing organization, bank or
other financial institution that holds
customers' securities in the ordinary course
of its trade or business,
i. certifying to the U.S. payor under
penalties of perjury that an
Internal Revenue Service Form W-8BEN
or an acceptable substitute form has
been received from you by it or by a
similar financial institution
between it and you, and
ii. to which is attached a copy of the
Internal Revenue Service Form W-8BEN
or acceptable substitute form, or
e. the U.S. payor otherwise possesses
documentation upon which it may rely to treat
the payment as made to a non-United States
person in accordance with U.S. Treasury
regulations; and
o no deduction for any United States federal withholding tax
will be made from any gain that you realize on the sale or
exchange of your debt security.
Further, a debt security held by an individual, who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for U.S. federal estate tax purposes if:
o the decedent did not actually or constructively own 10% or
more of the total combined voting power of all classes of
stock of the issuer entitled to vote at the time of death; and
o the income on the debt security would not have been
effectively connected with a United States trade or business
of the decedent at the same time.
United States Alien Holders (BP Capital U.K., BP Canada or BP
Australia). This subsection describes the tax consequences to a United States
alien holder of debt securities issued by BP Capital U.K., BP Canada or BP
Australia. If you are a United States holder of debt securities issued by BP
Capital America, this subsection does not apply to you.
33
Payments of Interest. Subject to the discussion of backup withholding
below, payments of principal, premium, if any, and interest, including OID, on a
debt security is exempt from U.S. federal income tax, including withholding tax,
whether or not you are engaged in a trade or business in the United States,
unless:
o you are an insurance company carrying on a U.S. insurance
business to which the interest is attributable, within the
meaning of the Code; or
o you both:
o have an office or other fixed place of
business in the United States to which the
interest is attributable; and
o derive the interest in the active conduct of
a banking, financing or similar business
within the United States.
Purchase, Sale, Retirement and Other Disposition of the Debt
Securities. You generally will not be subject to U.S. federal income tax on gain
realized on the sale, exchange or retirement of a debt security unless:
o the gain is effectively connected with your conduct of a trade
or business in the United States; or
o you are an individual, you are present in the United States
for 183 or more days during the taxable year in which the gain
is realized and certain other conditions exist.
For purposes of the U.S. federal estate tax, the debt securities will
be treated as situated outside the United States and will not be includible in
the gross estate of a holder who is neither a citizen nor a resident of the
United States at the time of death.
Backup Withholding and Information Reporting (BP Capital America)
This subsection describes the backup withholding and information
reporting relating to holders of debt securities issued by BP Capital America.
United States Holders. In general, if you are a noncorporate United
States holder, the issuer and other payors are required to report to the
Internal Revenue Service all payments of principal, any premium, if any, and
interest on your debt security, and the accrual of OID on a discount debt
security. In addition, the proceeds of the sale of your debt security before
maturity within the United States will be reported to the U.S. Internal Revenue
Service. Additionally, backup withholding will apply to any payments, including
payments of OID, if you fail to provide an accurate taxpayer identification
number, or you are notified by the Service that you have failed to report all
interest and dividends required to be shown on your federal income tax returns.
United States Alien Holders. In general, if you are a United States
alien holder, payments of principal, premium, if any, or interest, including
OID, made by us and other payors to you will not be subject to backup
withholding and information reporting, provided that the certification
requirements described above under "-- United States Alien Holders (BP Capital
America)" are satisfied or you otherwise establish an exemption. However, we and
other payors are required to report payments of interest on your debt securities
on Internal Revenue Service Form 1042-S even if the payments are not otherwise
subject to information reporting requirements. In addition, payment of the
proceeds from the sale of debt securities effected at a United States office of
a broker will not be subject to backup withholding and information reporting
provided that:
o the broker does not have actual knowledge or reason to know
that you are a United States person and you have furnished to
the broker:
o an appropriate Internal Revenue Service Form W-8 or
an acceptable substitute form upon which you certify,
under penalties of perjury, that you are not a United
States person, or
34
o other documentation upon which it may rely to treat
the payment as made to a non-United States person in
accordance with U.S. Treasury regulations, or
o you otherwise establish an exemption.
If you fail to establish an exemption and the broker does not possess
adequate documentation of your status as a non-United States person, the
payments may be subject to information reporting and backup withholding.
However, backup withholding will not apply with respect to payments made to an
offshore account maintained by you unless the broker has actual knowledge that
you are a United States person.
In general, payment of the proceeds from the sale of debt securities
effected at a foreign office of a broker will not be subject to information
reporting or backup withholding. However, a sale effected at a foreign office of
a broker will be subject to information reporting and backup withholding if:
o the proceeds are transferred to an account maintained by you
in the United States,
o the payment of proceeds or the confirmation of the sale is
mailed to you at a United States address, or
o the sale has some other specified connection with the United
States as provided in U.S. Treasury regulations,
unless the broker does not have actual knowledge or reason to know that you are
a United States person and the documentation requirements described above
(relating to a sale of debt securities effected at a United States office of a
broker) are met or you otherwise establish an exemption.
In addition, payment of the proceeds from the sale of debt securities
effected at a foreign office of a broker will be subject to information
reporting if the broker is:
o a United States person,
o a controlled foreign corporation for United States tax
purposes,
o a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a United States
trade or business for a specified three-year period, or
o a foreign partnership, if at any time during its tax year:
o one or more of its partners are "US persons", as
defined in U.S. Treasury regulations, who in the
aggregate hold more than 50% of the income or capital
interest in the partnership, or
o such foreign partnership is engaged in the conduct of
a United States trade or business,
unless the broker does not have actual knowledge or reason to know that you are
a United States person and the documentation requirements described above
(relating to a sale of debt securities effected at a United States office of a
broker) are met or you otherwise establish an exemption.
Backup Withholding and Information Reporting (BP Capital U.K., BP
Canada or BP Australia)
This subsection describes the backup withholding and information
reporting requirements regarding holders of debt securities issued by BP Capital
U.K., BP Canada or BP Australia.
35
United States Holders. If you are a noncorporate United States holder,
information reporting requirements, on Internal Revenue Service Form 1099,
generally will apply to payments of principal and interest on a debt security
within the United States, including payments made by wire transfer from outside
the United States to an account you maintain in the United States.
Additionally, backup withholding will apply to such payments if you are
a noncorporate United States holder that:
o fails to provide an accurate taxpayer identification number,
o is notified by the Internal Revenue Service that you have
failed to report all interest and dividends required to be
shown on your federal income tax returns, or
o in certain circumstances, fails to comply with applicable
certification requirements.
United States Alien Holders. If you are a United States alien holder,
you are generally exempt from backup withholding and information reporting
requirements with respect to:
o payments of principal and interest made to you outside the
United States by the Company or another non-United States
payor and
o other payments of principal and interest, as long as the
income associated with such payments is otherwise exempt from
United States federal income tax, and:
o the payor or broker does not have actual knowledge or
reason to know that you are a United States person
and you have furnished to the payor or broker:
o an Internal Revenue Service Form W-8BEN or
an acceptable substitute form upon which you
certify, under penalties of perjury, that
you are a non-United States person, or
o other documentation upon which it may rely
to treat the payments as made to a
non-United States person in accordance with
U.S. Treasury regulations, or
o you otherwise establish an exemption.
Payment of the proceeds from the sale of debt securities issued by BP
Capital U.K., BP Canada or BP Australia will have the same information reporting
and backup withholding consequences as payments of the proceeds from the sale of
debt securities issued by BP Capital America described above.
United Kingdom Taxation
The following is a summary of the United Kingdom withholding tax
treatment at the date hereof in relation to the payment of principal, interest,
discount and premium in respect of the debt securities and also contains a
summary of some other salient points relating to the United Kingdom taxation
treatment of holders of debt securities. Except where the context otherwise
requires, the comments relate only to the position of persons who are absolute
beneficial owners of the debt securities and do not deal with the position of
certain classes of holders such as dealers. This section is the opinion of the
Group General Counsel to BP. Prospective investors who are in any doubt as to
their tax positions should consult their professional advisers.
1. Debt securities issued by BP Capital U.K. ("U.K. debt securities")
(A) While U.K. debt securities continue to be listed on a recognized stock
exchange as defined in Section 841 of the Income and Corporation Taxes Act 1988
(which includes the London and Paris Stock Exchanges), payments of
36
interest, on or after April 1, 2001, may be made without withholding or
deduction for or on account of United Kingdom income tax.
(B) Interest on the debt securities may also be paid without withholding or
deduction on account of United Kingdom tax where interest on the debt securities
is paid to a person who belongs in the United Kingdom and the Issuer reasonably
believes (and any person by or through whom interest on the debt securities is
paid reasonably believes) that the beneficial owner is within the charge to
United Kingdom corporation tax as regards the payment of interest at the time
the payment is made, provided that the Inland Revenue has not given a direction
that it has reasonable grounds to believe that it is likely that the beneficial
owner is not within the charge to United Kingdom corporation tax in respect of
such payment of interest at the time the payment is made.
(C) In all cases not falling within paragraph (A) or (B) above, subject to
relief under an applicable double taxation treaty, interest on U.K. debt
securities will be paid under deduction of United Kingdom income tax at the
lower rate (currently 20%) except in the case of interest on U.K. debt
securities with a maturity date of less than one year from the date of issue
(and the borrowing under such debt securities at no time forms part of a
borrowing which is intended to have a total term of one year or more).
(D) Payments on debt securities that, although not expressed to be interest,
fail to be treated as yearly interest for United Kingdom tax purposes will also
be subject to the withholding tax rules described above. A premium payable on a
redemption of a debt security may fall to be treated as yearly interest for
United Kingdom tax purposes. When U.K. debt securities are issued at a discount
or redeemable at a premium, United Kingdom withholding tax will not apply to the
payment of such discount or premium so long as it does not constitute yearly
interest for U.K. tax purposes.
Payments, or parts thereof, constituting income in respect of U.K. debt
securities have a United Kingdom source and accordingly will be chargeable to
United Kingdom tax by direct assessment even if paid without withholding or
deduction. However, income in respect of debt securities with a United Kingdom
source received without deduction or withholding on account of United Kingdom
tax will not be chargeable to United Kingdom tax unless that securities holder
carries on a trade, profession or vocation in the United Kingdom through a
United Kingdom branch
(E) or agency in connection with which the income is received or to which the
debt securities are attributable. There are certain exemptions for income
received by certain categories of agent (such as some brokers and investment
managers).
2. Debt Securities issued by BP Capital America, BP Canada and
BP Australia ("non-U.K. debt securities")
(A) Payments of interest on non-U.K. debt securities may be made without
withholding on account of United Kingdom income tax.
(B) Any income in respect of debt securities issued by BP Capital America, BP
Canada or BP Australia acting through a branch located in the United Kingdom may
have a United Kingdom source. The statements in paragraphs 1(E) and (F) above
will apply to any such income having a United Kingdom source.
3. All debt securities
(A) Holders of debt securities which are companies within the charge to U.K.
corporation tax may be subject to U.K. corporation tax on their holding,
disposal and redemption (including a part redemption of debt securities that are
redeemable in two or more installments) of debt securities. In general, all
returns on and fluctuations in the value of the debt securities will be charged
to tax as income in accordance with securities holders' statutory accounting
treatment. Such securities holders will generally be charged to tax in each
accounting period by reference to the interest accrued in that period.
Fluctuations in value relating to foreign exchange gains and losses in respect
of the debt securities will also be brought into account as income.
(B) Holders of debt securities who are individuals and who are resident or
ordinarily resident in the United Kingdom or carry on a trade in the United
Kingdom through a branch or agency to which debt securities are attributable may
be subject to U.K. income or capital gains tax on the disposal or redemption
(including a part
37
redemption of debt securities that are redeemable in two or more installments)
of debt securities. The nature of the tax charge will depend on the terms of the
debt securities in question and the particular circumstances of the relevant
securities holder. In particular, individual securities holders should have
regard, where appropriate, to the capital gains tax legislation, the "accrued
income scheme" and the "relevant discounted securities legislation" and they
should note that under certain provisions of United Kingdom tax legislation (the
"relevant discounted securities legislation") the issue of debt securities under
a particular Pricing Supplement may, in certain circumstances, alter the tax
treatment of debt securities previously issued.
4. Provision of Information by and/or to the Inland Revenue
Securities holders who are individuals may wish to note that the Inland
Revenue has power to obtain information (including the name and address of the
beneficial owner of the interest) from any person in the United Kingdom:
o who either pays interest to or receives interest for the
benefit of an individual; or
o who, after April 5, 2002, either pays amounts payable on the
redemption of debt securities which are relevant discounted
securities (for the purposes of the Finance Act 1996) to, or
receives such amounts for the benefit of, an individual. Such
information may, in certain circumstances, be exchanged by the
Inland Revenue with the tax authorities of other
jurisdictions.
5. Guarantee Payments
Any payments made by BP under the guarantee either to:
o holders who beneficially own debt securities, or
o either issuer to enable it to make payments of principal or
interest in respect of the debt securities,
will have a U.K. source for U.K. tax purposes. Therefore recipients may be
directly assessed for U.K. tax on the receipt of this payment. However, where a
payment is made to a holder who is resident in another jurisdiction, the
recipient will not be directly assessed for U.K. tax on that payment, unless
such recipient carries on a trade, profession or vocation in the U.K. through a
U.K. branch or agency in connection with which the interest is received or to
which those debt securities are attributable, in which case (subject to
exceptions for interest received by certain categories of agents) tax may be
levied on the U.K. branch or agency.
6. Inheritance Tax
A holder of debt securities who is an individual domiciled outside the
United Kingdom will generally not be liable to U.K. inheritance tax in respect
of his holding of debt securities. This will be the case if a register of the
debt securities is maintained outside the United Kingdom. If no register is
maintained, there may be a liability to inheritance tax if the debt securities
are held in the United Kingdom. If so, exemption from or reduction in any U.K.
inheritance tax liability may be available for holders of debt securities who
are resident in another jurisdiction under the Estate Tax Treaty made between
the United Kingdom and the United States.
Holders of debt securities who are resident in the United Kingdom may
be liable to inheritance tax with respect of their holdings of debt securities.
7. Stamp Duty and Stamp Duty Reserve Tax
No U.K. stamp duty or stamp duty reserve tax will generally be payable
by a holder of debt securities on the creation, issue or redemption of the debt
securities by BP Capital U.K.
38
No liability for U.K. stamp duty or stamp duty reserve tax will arise
on a transfer, or an agreement to transfer, of debt securities unless such
securities carry:
o a right of conversion into shares or other securities;
o a right to interest, the amount of which is or was determined
to any extent by reference to the results of, or of any part
of, a business or to the value of any property;
o a right to interest the amount of which exceeds a reasonable
commercial return on the nominal amount of the capital; or
o a right of repayment to an amount which exceeds the nominal
amount of the capital and is not reasonably comparable with
what is generally repayable (in respect of a similar nominal
amount of capital) under the terms of issue of loan capital
listed on the Official List of the London Stock Exchange.
8. Proposed European Union Directive on the Taxation of Savings
On July 18, 2001 the EU Commission published a proposal for a new
directive regarding the taxation of savings income. It is proposed that, subject
to a number of important conditions being met, Member States will be required to
provide to the tax authorities of another Member State details of payments of
interest or other similar income paid by a person within its jurisdiction to an
individual resident in that other Member State, subject to the right of certain
Member States (including Luxembourg but not including the UK) to opt instead for
a withholding system for a transitional period in relation to such payments. The
proposals are not yet final, and they may be subject to further amendment and/or
clarification.
- --------------------------------------------------------------------------------
Please consult your own tax advisor concerning the consequences of owning these
debt securities in your particular circumstances under the Code and the laws of
any other taxing jurisdiction.
- --------------------------------------------------------------------------------
Canadian Taxation
The following is a summary of the principal Canadian federal income tax
consequences at the date of the prospectus to a holder of debt securities who is
a non-resident of Canada in relation to the payment of principal, interest,
discount and premium in respect of debt securities issued by BP Canada. This
summary is based on the current provisions of the Income Tax Act (Canada) and
the regulations under that Act, current published administrative practices of
Canada Customs and Revenue Agency, and all specific proposals to amend the
Income Tax Act (Canada) and the regulations announced by the Minister of Finance
prior to the date of this prospectus. This section is the opinion of the Senior
Legal Counsel of BP Canada. This summary does not otherwise take into account or
anticipate changes in the law whether by judicial, governmental or legislative
decisions or action, nor does it take into account tax legislation or
considerations of any province or territory of Canada or any jurisdiction other
than Canada.
This summary assumes that, throughout the period debt securities are
outstanding, BP Canada will deal with you at arm's length within the meaning of
the Income Tax Act (Canada), and that BP Canada will not, under any
circumstances be obliged to pay more than 25% of the aggregate principal amount
of the debt securities within five years from the later of the date of issue of
any debt securities, or if payment in full of any debt securities is not made on
the date of issue, within five years from the date of final payment being made
for such debt securities, except in the event of a failure or default under the
terms of the debt securities or of any agreement relating to the debt securities
or if the terms of the debt securities or any such agreement become unlawful or
are changed by legislative, judicial or administrative action.
The payment by BP Canada of interest or principal on the debt
securities to a holder who is a non-resident of Canada and with whom BP Canada
deals at arm's length within the meaning of the Income Tax Act (Canada), at the
time amounts are payable, in the case of interest, or at the time the payments
are made, in the case of principal, will be exempt from Canadian withholding
tax. For the purposes of the Income Tax Act (Canada), related persons,
39
(as defined in the Income Tax Act (Canada)) are deemed not to deal at arm's
length and it is a question of fact whether persons not related to each other
deal at arm's length.
In addition, to qualify for the exemption, no portion of the interest
may be contingent or dependent upon the use of or production from property in
Canada, or be computed by reference to revenue, profit, cash flow, commodity
price or any similar criterion or by reference to dividends paid or payable to
shareholders of any class of shares of the capital stock of a corporation.
No other taxes on income (including taxable capital gains) will be
payable under the Income Tax Act (Canada) on the holding, redemption or
disposition of the debt securities, or the receipt of interest on the debt
securities by holders who are neither residents nor deemed to be residents of
Canada for the purposes of the Income Tax Act (Canada) and who do not use or
hold and are not deemed by those laws to use or hold the debt securities in
carrying on business in Canada for the purposes of the Income Tax Act (Canada),
except that in some circumstances holders who are non-resident insurers carrying
on an insurance business in Canada and elsewhere may be subject of those taxes.
There are no estate taxes or succession duties imposed under the
federal laws of Canada.
Australian Taxation
The following is a summary of the Australian taxation treatment at the
date of this prospectus of payments of principal, interest and discount on the
debt securities to be issued by BP Australia and certain other matters. It is
not exhaustive and, in particular, it focuses on the treatment of off-shore
holders of debt securities. In addition the matters raised in this summary are
subject to change, possibly with retro-active effect, and should be treated with
appropriate caution. This section is the opinion of Mallesons Stephen Jaques,
Australian counsel to BP Australia. Prospective holders of debt securities who
will hold the debt securities in Australia or who are in any doubt as to their
tax position should consult their professional advisers.
An exemption from Australian interest withholding tax ("AIWT") is
available in respect of the debt securities to be issued by BP Australia under
section 128F of the Income Tax Assessment Act 1936 of Australia ("Australian Tax
Act'") if the following conditions are met:
o BP Australia is a resident of Australia when it issues the debt
securities and when interest (as defined in section 128A(IAB)) is paid;
o the debt securities are issued in a manner which satisfies the public
offer test. There are five principal methods of satisfying the public
offer test, the purpose of which is to ensure that lenders in overseas
capital markets are aware that BP Australia is offering debt securities
for issue. In summary, the five methods are:
o offers to 10 or more unrelated financiers or securities
dealers;
o offers to 100 or more investors;
o offers of listed debt securities;
o offers via publicly available information sources; and
o offers to a dealer, manager or underwriter who offers to sell
the debt securities within 30 days by one of the preceding
methods.
In addition, the issue of a global security and the offering of
interests in the Global Security by one of these methods can also satisfy the
public offer test.
The exemption from AIWT is only available provided:
40
o BP Australia does not know, or have reasonable grounds to suspect, that
at the time of issue, the debt securities were being, or would later
be, acquired, directly or indirectly, by an associate of BP Australia
(other than in the capacity of a dealer, manager or underwriter in
relation to the placement of the debt securities); and
o BP Australia does not pay interest under a debt security to an
associate (other than in the capacity of a dealer, manager or
underwriter in relation to the placement of the debt securities) unless
at the time of the payment of interest, BP Australia does not know, or
have reasonable grounds to suspect, that the payee is an associate of
BP Australia.
BP Australia proposes to issue debt securities in a manner which will
satisfy the requirements of section 128F of the Australian Tax Act.
If BP Australia should at any time be compelled by law to deduct or
withhold an amount in respect of any Australian withholding taxes, BP Australia
shall, subject to certain exceptions, pay such additional amounts as may be
necessary in order to ensure that the net amounts received by the holders of the
debt securities after such deduction or withholding shall equal the respective
amounts which would have been receivable had no such deduction or withholding
been required.
BP Australia has been advised that under Australian laws as presently
in effect:
o assuming the requirements of section 128F of the Australian
Tax Act are satisfied with respect to the debt securities,
payments of principal, interest and any discount in respect of
the debt securities to a holder who is a non-resident of
Australia and who, during the taxable year, has not held the
debt securities in the course of carrying on business through
a permanent establishment within Australia, will not be
subject to Australian income taxes;
o a holder of the debt securities, who is a non-resident of
Australia and who during the taxable year has not held the
debt securities in the course of carrying on business through
a permanent establishment within Australia, will not be
subject to Australian income tax on gains realized during that
year on sale or redemption of the debt securities, provided
such gains do not have an Australian source. A gain arising on
the sale of a debt security by a non-Australian resident
holder to another non-Australian resident where the debt
security is sold outside Australia and all negotiations are
conducted, and the documentation is executed outside Australia
would not be regarded as having an Australian source;
o there are specific rules that can apply to treat a portion of
the sale price of debt securities as interest for withholding
tax purposes (which portion is not covered by the exemption in
section 128F of the Australian Tax Act) when certain debt
securities originally issued at a discount or with a maturity
premium or which do not pay interest at least annually are
sold to an Australian resident (who does not acquire them in
the course of carrying on business at or through a permanent
establishment outside Australia) or a non-resident (who
acquires them in the course of carrying on a trade or business
at or through a permanent establishment in Australia). The
Federal Government has announced that these rules will be
amended, and section 128F will apply to exempt that portion of
the sale price from AIWT after August 29, 2001. However, that
announcement has not yet been introduced into the Australian
Tax Act;
o no debt securities will be subject to death, estate or
succession duties imposed by Australia, or by any political
subdivision or authority therein having power to tax, if held
at the time of death;
o no ad valorem stamp, issue, registration or similar taxes are
payable in Australia on the issue of any debt securities or
the transfer of any debt securities (except in certain
circumstances where the transfer occurs in Australia otherwise
than for full market value); and
41
o section 12-140 of the Taxation Administration Act 1953 of
Australia ("TAA") imposes a type of withholding tax at the
rate of (currently) 48.5% on the payment of interest on
certain securities unless the holder has quoted a tax file
number ("TFN"), or in certain circumstances an Australian
Business Number ("ABN"), or proof of some other exemption.
Assuming the requirements of section 128F of the Australian Tax Act are
satisfied with respect to the debt securities in registered form, these
rules should not apply to payments to a holder of registered debt
securities who is not a resident of Australia for tax purposes and not
holding the debt securities in the course of carrying on business at or
through a permanent establishment in Australia. Withholdings may be
made from payments to holders of registered debt securities who are
residents of Australia or non-residents carrying on business at or
through a permanent establishment in Australia but who do not quote a
TFN, (in certain circumstances) an ABN or provide proof of an
appropriate exemption. For the avoidance of doubt, these provisions
will also not apply to debt securities in bearer form.
A number of significant changes to Australia's tax laws have been
effected as part of the Federal Government's tax reform measures, including the
New Business Tax System (Debt and Equity) Act 2001 of Australia ("Debt/Equity
Act"), which took effect from July 1, 2001 and contains new tests for
characterising debt (for all entities) and equity (for companies) for Australian
tax purposes, including for the purposes of dividend and interest withholding
tax.
BP Australia intends to issue debt securities which are to be
characterised as "debt interests" for the purposes of the tests introduced by
the Debt/Equity Act so that the returns paid on the debt securities will
continue to be "interest" for the purpose of section 128F of the Australian Tax
Act. Accordingly, the Debt/Equity Act should not impact the tax treatment of the
holders of the debt securities.
The Federal Government's announcement (referred to above) also says
that section 128F of the Australian Tax Act will be amended (effective from
August 29, 2001) to provide that the :
o section 128F exemption from AIWT will not be lost if an on-shore
associate purchases debt securities of a related Australian issuer.
On-shore associates are associates that are Australian residents or
non-residents carrying on business at or through a permanent
establishment in Australia;
o class of off-shore associates that can acquire debt securities issued
by a related Australian issuer is to be expanded to include clearing
houses, paying agents, custodians and managers.
No Australian approvals are currently required for or in connection
with the issue of the debt securities by BP Australia or for or in connection
with the performance and enforceability of such debt securities. However, the
specific approval of the Reserve Bank of Australia must be obtained in
connection with certain payments to and transactions having a prescribed
connection with countries and entities designated from time to time by the
Reserve Bank of Australia for the purposes of the Banking (Foreign Exchange)
Regulations (currently the Federal Republic of Yugoslavia (Serbia and
Montenegro), Iraq, Libya, the Taliban (Islamic Emirate of Afghanistan) and the
National Union for the Total Independence of Angola (UNITA)) and certain named
individuals or organisations associated with terrorism.
42
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus:
o through underwriters;
o through dealers;
o through agents; or
o directly to purchasers.
The prospectus supplement relating to any offering will identify or
describe:
o any underwriter, dealers or agents;
o their compensation;
o the net proceeds to us;
o the purchase price of the securities;
o the initial public offering price of the securities; and
o any exchange on which the securities will be listed.
Underwriters
If we use underwriters in the sale, they will acquire securities for
their own account and may resell the securities from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Unless we otherwise
state in the prospectus supplement, various conditions to the underwriters'
obligation to purchase securities apply, and the underwriters will be obligated
to purchase all of the securities contemplated in an offering if they purchase
any of such securities. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Dealers
If we use dealers in the sale, unless we otherwise indicate in the
prospectus supplement, we will sell securities to the dealers as principals. The
dealers may then resell the securities to the public at varying prices that the
dealers may determine at the time of resale.
Agents and Direct Sales
We may sell securities directly or through agents that we designate.
The prospectus supplement will name any agent involved in the offering and sale
and states any commissions we will pay to that agent. Unless we indicate
otherwise in the prospectus supplement, any agent is acting on a best efforts
basis for the period of its appointment.
Institutional Investors
If we indicate in the prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers from various institutional
investors to purchase securities. In this case, payment and delivery will be
made on
43
a future date that the prospectus supplement specifies. The underwriters,
dealers or agents may impose limitations on the minimum amount that the
institutional investor can purchase. They may also impose limitations on the
portion of the aggregate amount of the securities that they may sell. These
institutional investors include:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies;
o educational and charitable institutions; and
o other similar institutions as we may approve.
The obligations of any of these purchasers pursuant to delayed delivery
and payment arrangements will not be subject to any conditions. However, one
exception applies. An institution's purchase of the particular securities can
not at the time of delivery be prohibited under the laws of any jurisdiction
that governs:
o the validity of the arrangements; or
o the performance by us or the institutional investor.
Indemnification
Agreements that we have entered into with underwriters, dealers or
agents may entitle them to indemnification by us against various civil
liabilities. These include liabilities under the Securities Act of 1933. The
agreements may also entitle them to contribution for payments which they may be
required to make as a result of these liabilities. Underwriters, dealers and
agents may be customers of, engage in transactions with, or perform services
for, us in the ordinary course of business.
Market Making
In the event that we do not list securities of any series on a U.S.
national securities exchange, various broker-dealers may make a market in the
securities, but will have no obligation to do so, and may discontinue any market
making at any time without notice. Consequently, it may be the case that no
broker-dealer will make a market in securities of any series or that the
liquidity of the trading market for the securities will be limited.
Certain Selling Restrictions
The debt securities have not been, and will not be, qualified for sale
under the securities law of Canada or any province or territory thereof. Unless
otherwise specified in the relevant prospectus supplement, all debt securities
of BP Canada will be issued with minimum denominations of CAN$150,000 or its
equivalent in other currencies or, in the case of zero coupon debt securities,
having an amortized face amount of at least CAN$150,000 or its equivalent in
other currencies. In addition, debt securities may not be offered, sold or
delivered, directly or indirectly, in Canada or to, or for the benefit of, any
resident thereof except pursuant to available exemptions from applicable
Canadian provincial or territorial securities laws
VALIDITY OF SECURITIES
The Group General Counsel of BP will pass upon the validity of the debt
securities and guarantees as to matters of English law. The Assistant General
Counsel of BP will pass upon the validity of the debt securities and guarantees
as to matters of United States law. The Senior Legal Counsel of BP Canada will
pass upon Canadian law matters. The Managing Legal Adviser of BP Australia will
pass upon Australian law matters.
44
In connection with particular offerings of debt securities in the
future, the validity of those debt securities may be passed upon by Sullivan &
Cromwell, U.S. counsel to BP, as to certain matters of New York law. Cleary,
Gottlieb, Steen & Hamilton or any other law firm named in the applicable
prospectus supplement will pass upon the validity of the debt securities for any
underwriters or agents as to certain matters of New York law.
EXPERTS
The consolidated financial statements of BP appearing in BP's Annual
Report on Form 20-F for the year ended December 31, 2000, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in auditing and
accounting.
The consolidated financial statements of Atlantic Richfield Company for
the year ended December 31, 2000 appearing in BP's Form 6-K filed on February
19, 2002, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
45
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
BP and BP Capital U.K. are public limited companies incorporated under
the laws of England and Wales. BP Canada is incorporated under the laws of Nova
Scotia. BP Australia is incorporated under the laws of Australia. Many of our
directors and officers, and some of the experts named in this document, reside
outside the United States, principally in the United Kingdom. In addition,
although we have substantial assets in the United States, a large portion of our
assets and the assets of our directors and officers is located outside of the
United States. As a result, U.S. investors may find it difficult in a lawsuit
based on the civil liability provisions of the U.S. federal securities laws:
o to effect service within the United States upon us or our
directors and officers located outside the United States;
o to enforce in U.S. courts or outside the United States
judgments obtained against us or those persons in the U.S.
courts;
o to enforce in U.S. courts judgments obtained against us or
those persons in courts in jurisdictions outside the United
States; and
o to enforce against us or those persons in the United Kingdom,
Canada and Australia, whether in original actions or in
actions for the enforcement of judgments of U.S. courts, civil
liabilities based solely upon the U.S. federal securities
laws.
46
EXPENSES
The following are the estimated expenses to be incurred in connection
with the issuance and distribution of the debt securities registered with the
SEC under the registration statement:
Securities and Exchange Commission registration fee ........................... $552,000
Printing and engraving expenses ............................................... $200,000
Legal fees and expenses ....................................................... $500,000
Accounting fees and expenses .................................................. $200,000
Indentures' Trustees' fees and expenses ....................................... $71,000
---------------
Total $1,533,000
===============
47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
BP and BP Capital U.K.
English law does not permit a company to indemnify a director or an
officer of the company against any liability which by virtue of any rule of law
would otherwise attach to him or her in respect of negligence, default, breach
of duty or breach of trust in relation to the company except liability incurred
by such director or officer in defending any legal proceeding (whether civil or
criminal) in which judgment is given in his or her favor or in which he or she
is acquitted or in certain instances where, although he or she is liable, a
court finds that such director or officer acted honestly and reasonably and that
having regard to all the circumstances he or she ought fairly to be excused and
relief is granted by the court.
Article 137 of BP's Articles of Association currently provides:
"Subject to the provisions of and so far as may be consistent with the
Statutes, every Director, Auditor, Secretary or other officer of the
Company shall be entitled to be indemnified by the Company against all
costs, charges, losses, expenses and liabilities incurred by him in the
execution and/or discharge of his duties and/or the exercise of his
powers and/or otherwise in relation to or in connection with his
duties, powers or office."
Article 51 of BP Capital U.K.'s Articles of Association provides:
"Subject to the provisions of the Companies Act, every director,
auditor, secretary or other officer of the Company shall be entitled to
be indemnified by the Company against all costs, charges, losses,
expenses and liabilities incurred by him in the execution and discharge
of his duties or in relation thereto including any liability incurred
by him in defending any proceedings, civil or criminal, which relate to
anything done or omitted or alleged to have been done or omitted by him
as an officer or employee of the Company and in which judgement is
given in his favour (or the proceedings are otherwise disposed of
without any finding or admission of any material breach of duty on his
part) or in which he is acquitted or in connection with any application
under any statute for relief from liability in respect of any such act
or omission in which relief is granted to him by the Court."
Section 310 of the Companies Act 1985 of Great Britain, as amended (the
"Companies Act"), provides as follows:
"1. This section applies to any provision, whether contained in a company's
articles or in any contract with the company or otherwise, for exempting any
officer of the company or any person (whether an officer or not) employed by the
company as auditor from, or indemnifying him against, any liability which by
virtue of any rule of law would otherwise attach to him in respect of any
negligence, default, breach of duty or breach of trust of which he may be guilty
in relation to the company.
"2. Except as provided by the following subsection, any such provision is void.
"3. This section does not prevent a company--
(a) from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
(b) from indemnifying any such officer or auditor against any liability
incurred by him--
(i) in defending any proceedings (whether civil or criminal) in which
judgment is given in his favour or he is acquitted, or
II-1
(ii) in connection with any application under section 144(3) or (4)
(acquisition of shares by innocent nominee) or section 727
(general power to grant relief in case of honest and reasonable
conduct) in which relief is granted to him by the court."
Section 727 of the Companies Act provides as follows:
"727. Power of court to grant relief in certain circumstances:
"(1) If in any proceedings for negligence, default, breach of duty or
breach of trust against an officer of a company or a person
employed by a company as auditor (whether he is or is not an
officer of the company) it appears to the court hearing the case
that officer or person is or may be liable in respect of the
negligence, default, breach of duty or breach of trust, but that
he has acted honestly and reasonably, and that having regard to
all the circumstances of the case (including those connected
with his appointment) he ought fairly to be excused for the
negligence, default, breach of duty or breach of trust, that
court may relieve him, either wholly or partly, from his
liability on such terms as it thinks fit.
(2) If any such officer or person as above-mentioned has reason to
apprehend that any claim will or might be made against him in
respect of any negligence, default, breach of duty or breach of
trust, he may apply to the court for relief; and the court on
the application has the same power to relieve him as under this
section it would have had if it had been a court before which
proceedings against that person for negligence, default, breach
of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a
judge with a jury, the judge, after hearing the evidence, may,
if he is satisfied that the defendant or defender ought in
pursuance of that subsection to be relieved either in whole or
in part from the liability sought to be enforced against him,
withdraw the case in whole or in part from the jury and
forthwith direct judgment to be entered for the defendant or
defender on such terms as to costs or otherwise as the judge may
think proper."
BP Capital America
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director or officer of such corporation. The statute provides
that it is not exclusive of other rights to which those seeking indemnification
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
The Bylaws of BP Capital America provide that to the extent not
inconsistent with Delaware law, any person who is or was a director or officer
of BP Capital America may, by action of the board of directors (whether or not a
quorum exists), be indemnified against any and all liability and reasonable
expense that may be incurred in connection with or resulting from certain
claims.
Claims for which indemnification may be available include actual or
threatened claims, actions, suits or proceedings, whether derivative, civil,
criminal, or investigative in which a director or officer may become involved,
as a party or otherwise: (a) by reason of being or having been a director or
officer of BP Capital America, or of another corporation at the request of BP
Capital America and of which it is a stockholder or creditor or otherwise has a
financial interest; (b) by reason of having acted in any capacity for a
partnership, trust, foundation, not-for-profit corporation or similar entity at
the request of BP Capital America; (c) by reason of actions taken or not taken
as an officer or director of BP Capital America, whether or not continuing as
such at the time the actual liability or expense was incurred.
The indemnity is only available if the person indemnified (i) is wholly
successful in having the claim terminate without any finding of liability or
guilt against him or her, or a reasonable period of time expires after a
II-2
threatened claim without any such suit being instituted, and without any payment
or promise made in settlement, or (ii) acted in good faith, in what the person
believed to be in the best interests of BP Capital America, and with respect to
any criminal action, had no reason to believe that his or her conduct was
unlawful. A plea of guilty or nolo contendere or its equivalent will not create
a presumption that the conduct of a director or officer did not meet the
standards for indemnification.
The board is not limited in granting indemnities, as determined in its
judgment, against risks outside of the subject matter of the bylaw provisions.
BP Canada
The Companies Act (Nova Scotia) does not restrict a company from
indemnifying directors and provides that in any proceeding against a director
for negligence or breach of trust in which it appears to the court hearing the
case that the director or person is or may be liable in respect of the
negligence or breach of trust, but has acted honestly and reasonably and ought
fairly to be excused for the negligence or breach of trust, the court may
relieve the director, either wholly or partly, from the director's liability on
such terms as the court may think proper.
The articles of association of BP Canada provide that every director or
officer, former director or officer, or person who acts or acted at BP Canada's
request, as a director or officer of BP Canada, a body corporate, partnership or
other association of which BP Canada is or was a shareholder, partner, member or
creditor, and the heirs and legal representatives of such person, in the absence
of any dishonesty on the part of such person, shall be indemnified by BP Canada
against, and it shall be the duty of the directors out of the funds of BP Canada
to pay, all costs, losses and expenses, including any amount paid to settle an
action or claim or satisfy a judgment, that such director, officer or person may
incur or become liable to pay in respect of any claim made against such person
or civil, criminal or administrative action or proceeding to which such person
is made by a party by reason of being or having been a director or officer of BP
Canada or such body corporate, partnership, or other association, whether BP
Canada is a claimant or party to such action or proceeding or otherwise; and the
amount for which such indemnity is proved shall immediately attach as a lien on
the property of BP Canada and have priority as against the shareholders over all
claims.
The articles of association of BP Canada also provide that no director
or officer, former director or officer, or person who acts or acted at BP
Canada's request, as a director or officer of BP Canada, a body corporate,
partnership or other association of which BP Canada is or was a shareholder,
partner, member or creditor, in the absence of any dishonesty on such person's
part, shall be liable for the acts, receipts, neglects or defaults of any other
director, officer or such person, or for joining in any receipt or other act for
conformity, or for any loss, damage or expense happening to BP Canada through
the insufficiency or deficiency of title to any property acquired for or on
behalf of BP Canada, or through the insufficiency or deficiency of any security
in or upon which any of the funds of BP Canada are invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person
with whom any funds, securities or effects are deposited, or for any loss
occasioned by error of judgment or oversight on the part of such person, or for
any other loss, damage or misfortune whatsoever which happens in the execution
of the duties of such person or in relation thereto.
BP Australia
The constitution of BP Australia Capital Markets Limited relevantly
provides an indemnity to every director and officer against all liability
incurred by him as director or officer in defending any proceedings whether
civil or criminal in which the director or officer is successful. The
constitution also relevantly exempts directors and officers from liability in
relation to the acts or defaults of any other director or officer, or for any
loss or expense to the company through the insufficiency or deficiency of any
title acquired or security obtained by the company, or for any loss or damage
arising from the bankruptcy, insolvency or tortious act of any person with whom
any moneys, securities or effects are deposited or left, or for any loss
occasioned by any error of judgment or oversight on the part of the director or
officer or for any other loss, damage or misfortune whatever which shall happen
in the execution of the duties of the office or in relation thereto unless the
same happen through the director's or officer's own negligence, default, breach
of trust.
II-3
The Corporations Act 2001 of Australia imposes limits on indemnities. A
company or a related body corporate cannot exempt a person from a liability to
the company incurred as a director or officer of the company. A company or a
related body corporate cannot indemnify a person against any liability incurred
as an officer of the company which is either owed to the company or a related
body corporate, or for a pecuniary penalty order or for a compensation order, or
owed to someone other than the company or a related body corporate and did not
arise out of conduct in good faith, incurred as an officer or auditor of the
company. A company or related body corporate must not indemnify a person against
legal costs incurred in defending an action for a liability as an officer of the
company if the proceeding is one in which the person is found to have a
liability in respect of which an indemnity is prohibited, or is a criminal
proceeding in which the person is found guilty, or is a proceeding brought by
the regulator or a liquidator for a court order if the grounds for making the
order are found by the court to have been established, or if the costs are
incurred in connection with proceedings for relief in which the court denies the
relief.
The Act also gives the court a power to relieve a director or officer
from liability if, in any civil proceeding against the person for negligence,
default, breach of trust or breach of duty in a capacity as a director or
officer, it appears to the court that the person is or may be liable in respect
of the negligence, default or breach but that the person has acted honestly and
that, having regard to all the circumstances of the case, including those
connected with the person's appointment, the person ought fairly to be excused.
Item 9. Exhibits
Exhibit Number Description of Document
-------------- ----------------------------------------------------------------------------------------------------
1.1 Form of Purchase Agreement for Guaranteed Debt Securities.
4.1 Form of Indenture, among BP Capital Markets America Inc., BP p.l.c. and JPMorgan Chase Bank.
4.2 Form of Indenture among BP Capital Markets p.l.c., BP p.l.c. and JPMorgan Chase Bank.
4.3 Form of Indenture among BP Canada Finance Company, BP p.l.c. and JPMorgan Chase Bank.
4.4 Form of Indenture among BP Australia Capital Markets Limited, BP p.l.c. and JPMorgan Chase
Bank.
4.5 Form of Debt Securities for BP Capital Markets America Inc. and Guarantees relating thereto
(included in Exhibit 4.1).
4.6 Form of Debt Securities for BP Capital Markets p.l.c. and Guarantees relating thereto
(included in Exhibit 4.2).
4.7 Form of Debt Securities for BP Canada Finance Company and Guarantees relating thereto
(included in Exhibit 4.3).
4.8 Form of Debt Securities for BP Australia Capital Markets Limited and Guarantees relating
thereto (included in Exhibit 4.4).
4.9 Memorandum and Articles of Association of BP p.l.c. (incorporated by reference to Exhibit 1
filed in BP p.l.c.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2000).
5.1 Opinion of Group General Counsel of BP p.l.c., as to the validity of the Guaranteed Debt
Securities of BP Capital Markets p.l.c. and the Guarantees as to certain matters of English
law.
5.2 Opinion of Assistant General Counsel of BP p.l.c., U.S. Counsel to BP p.l.c., BP Capital
Markets America Inc., BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia
Capital Markets Limited, as to the validity of (i) the Guaranteed Debt Securities of BP
Capital Markets America Inc. and the Guarantees issued in connection therewith and (ii) the
Guaranteed Debt Securities of BP Capital Markets p.l.c., BP Canada Finance Company and BP
Australia Capital Markets Limited, each as to certain matters of United States law.
5.3 Opinion of the Senior Legal Counsel of BP Canada Energy Company as to the validity of the
Guaranteed Debt Securities of BP Canada Finance Company and the Guarantees as to certain
matters of Canadian law.
5.4 Opinion of the Managing Legal Adviser of BP Australia Capital Markets Limited as to the validity
of the Guaranteed Debt Securities of BP Australia Capital Markets Limited and the Guarantees as to
certain matters of Australian law.
8.1 Opinion of Group General Counsel of BP p.l.c. as to certain matters of U.K. taxation
(included in Exhibit 5.1 above).
II-4
Exhibit Number Description of Document
-------------- ----------------------------------------------------------------------------------------------------
8.2 Opinion of Sullivan & Cromwell, U.S. counsel to BP p.l.c., BP Capital Markets America Inc.,
BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia Capital Markets
Limited., as to certain matters of U.S. taxation.
8.3 Opinion of the Senior Legal Counsel of BP Canada Energy Company as to certain matters of
Canadian taxation.
8.4 Opinion of Mallesons Stephen Jaques as to certain matters of Australian taxation.
23.1 Consent of Ernst & Young LLP, independent auditor.
23.2 Consent of Ernst & Young LLP, independent auditor.
23.3 Consent of Group General Counsel of BP p.l.c. (included in Exhibit 5.1 above).
23.4 Consent of the Assistant General Counsel of BP p.l.c. (included in Exhibit 5.2 above).
23.5 Consent of the Senior Legal Counsel of BP Canada Energy Company (included in Exhibit 5.3
above).
23.6 Consent of the Managing Legal Adviser of BP Australia Capital Markets Limited (included in
Exhibit 5.4 above).
23.7 Consent of Sullivan & Cromwell, U.S. counsel to BP p.l.c., BP Capital Markets America Inc.,
BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia Capital Markets
Limited (included in Exhibit 8.2 above).
23.8 Consent of the Senior Legal Counsel of BP Canada Energy Company (included in Exhibit 8.3
above).
23.9 Consent of Mallesons Stephen Jaques (included in Exhibit 8.4 above).
24.1 Powers of attorney (included as part of the signature pages hereof).
25.1 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.1 above.
25.2 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.2 above.
25.3 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.3 above.
25.4 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.4 above.
25.5 Statement of eligibility of Trustee on Form T-1 with respect to the Guarantees of
BP p.l.c.
Item 10. Undertakings
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales of the registered
securities are being made, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-5
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) To file a post-effective amendment to the registration statement to
include any financial statements required by Item 8.A. of Form 20-F at
the start of any delayed offering or throughout a continuous offering.
Financial statements and information otherwise required by Section
10(a)(3) of the Act need not be furnished, provided that the registrant
includes in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph (4) and other
information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, a post-effective amendment
need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Item 8.A. of Form 20-F if
such financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
Each of the undersigned registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of BP's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants, of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted against the registrants by such director,
officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-6
SIGNATURES OF BP
Pursuant to the requirements of the Securities Act of 1933, BP
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorised, in London, England on February 21, 2002.
BP p.l.c.
By: /s/ David J. Pearl
--------------------------------
Name: David J. Pearl
Title: Deputy Company Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below severally constitutes and appoints each person listed below or
David J. Pearl, Deputy Company Secretary (with full power to each of them to act
alone), his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to do any and all things and execute any and all
instruments that such attorney may deem necessary or advisable under the
Securities Act of 1933 (the "Securities Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of the Securities and
any securities or Blue Sky law of any of the states of the United States of
America in order to effect the registration or qualification (or exemption
therefrom) of the said securities for issue, offer, sale or trade under the Blue
Sky or other securities laws of any of such states and in connection therewith
to execute, acknowledge, verify, deliver, file and cause to be published
applications, reports, consents to service of process, appointments of attorneys
to receive service of process and other papers and instruments which may be
required under such laws, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign his name in his
capacity as an Officer, Director or Authorized Representative in the United
States or in any other capacity with respect to this Registration Statement and
any registration statement in respect of the Securities that is to be effective
upon filing pursuant to Rule 462(b) (collectively, the "Registration Statement")
and/or such other form or forms as may be appropriate to be filed with the
Commission or under or in connection with any Blue Sky laws or other securities
laws of any state of the United States of America or with such other regulatory
bodies and agencies as any of them may deem appropriate in respect of the
Securities, and with respect to any and all amendments, including post-effective
amendments, to this Registration Statement and to any and all instruments and
documents filed as part of or in connection with this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 21, 2002.
Signature Title
--------- -----
/s/ The Lord Browne of Madingley Executive Director Group Chief Executive
- ---------------------------------------------- (Principal Executive Officer)
The Lord Browne of Madingley
/s/ Dr. J.G.S. Buchanan Executive Director (Principal Financial and
- ---------------------------------------------- Accounting Officer)
Dr. J.G.S. Buchanan
II-7
- ---------------------------------------------- Non-Executive Chairman
P.D. Sutherland
/s/ R.F. Chase Executive Director, Deputy Group Chief Executive
- ----------------------------------------------
R.F. Chase
Executive Director
- ----------------------------------------------
W.D. Ford
/s/ Dr. B.E. Grote Executive Director
- ----------------------------------------------
Dr. B.E. Grote
/s/ R.L. Olver Executive Director
- ----------------------------------------------
R.L. Olver
/s/ J.H. Bryan Non-Executive Director
- ----------------------------------------------
J.H. Bryan
/s/ E.B. Davis, Jr. Non-Executive Director
- ----------------------------------------------
E.B. Davis, Jr.
/s/ Dr. D.S. Julius Non-Executive Director
- ----------------------------------------------
Dr. D.S. Julius
/s/ C.F. Knight Non-Executive Director
- ----------------------------------------------
C.F. Knight
Non-Executive Director
- ----------------------------------------------
F.A. Maljers
/s/ Dr. W.E. Massey Non-Executive Director
- ----------------------------------------------
Dr. W.E. Massey
Non-Executive Director
- ----------------------------------------------
H.M.P. Miles
II-8
/s/ Sir Robin Nicholson Non-Executive Director
- ----------------------------------------------
Sir Robin Nicholson
/s/ Sir Ian Prosser Non-Executive Director, Deputy Chairman
- ----------------------------------------------
Sir Ian Prosser
/s/ M.H. Wilson Non-Executive Director
- ----------------------------------------------
M.H. Wilson
/s/ Sir Robert Wilson Non-Executive Director
- ----------------------------------------------
Sir Robert Wilson
/s/ Daniel B. Pinkert Authorized Representative in the United States
- ----------------------------------------------
Daniel B. Pinkert
II-9
SIGNATURES OF BP CAPITAL AMERICA
Pursuant to the requirements of the Securities Act of 1933, BP Capital
Markets America Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorised, in Chicago on February 21, 2002.
By: /s/ R.J. Pillari
------------------------
Name: R. J. Pillari
Title: President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below severally constitutes and appoints each person listed below (with
full power to each of them to act alone), his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities to do any and all things
and execute any and all instruments that such attorney may deem necessary or
advisable under the Securities Act of 1933 (the "Securities Act"), and any
rules, regulations and requirements of the Securities and Exchange Commission
(the "Commission") in connection with the registration under the Securities Act
of the Securities and any securities or Blue Sky law of any of the states of the
United States of America in order to effect the registration or qualification
(or exemption therefrom) of the said securities for issue, offer, sale or trade
under the Blue Sky or other securities laws of any of such states and in
connection therewith to execute, acknowledge, verify, deliver, file and cause to
be published applications, reports, consents to service of process, appointments
of attorneys to receive service of process and other papers and instruments
which may be required under such laws, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign his
name in his capacity as an Officer, Director or Authorized Representative in the
United States or in any other capacity with respect to this Registration
Statement and any registration statement in respect of the Securities that is to
be effective upon filing pursuant to Rule 462(b) (collectively, the
"Registration Statement") and/or such other form or forms as may be appropriate
to be filed with the Commission or under or in connection with any Blue Sky laws
or other securities laws of any state of the United States of America or with
such other regulatory bodies and agencies as any of them may deem appropriate in
respect of the Securities, and with respect to any and all amendments, including
post-effective amendments, to this Registration Statement and to any and all
instruments and documents filed as part of or in connection with this
Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 21, 2002.
Signature Title
--------- -----
/s/ R.J. Pillari President (Principal Executive Officer)
- ----------------------------------------------------
R.J. Pillari
Vice President and Chief Financial
Officer (Principal Financial and
/s/ I. Springett Accounting Officer)
- ----------------------------------------------------
I. Springett
/s/ D.A. Dowling Director
- ----------------------------------------------------
D.A. Dowling
/s/ D.B. Pinkert Director
- ----------------------------------------------------
D.B. Pinkert
/s/ D.A. Plumb Director
- ----------------------------------------------------
D.A. Plumb
II-10
SIGNATURES OF BP CAPITAL U.K.
Pursuant to the requirements of the Securities Act of 1933, BP Capital
Markets p.l.c. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form F-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorised, in London, England on February 21, 2002.
By: /s/ Rebecca Weedon
------------------------------
Name: Rebecca Weedon
Title: Assistant Company Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below severally constitutes and appoints each person listed below or
Rebecca Weedon, Assistant Company Secretary (with full power to each of them to
act alone), his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to do any and all things and execute any and all
instruments that such attorney may deem necessary or advisable under the
Securities Act of 1933 (the "Securities Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of the Securities and
any securities or Blue Sky law of any of the states of the United States of
America in order to effect the registration or qualification (or exemption
therefrom) of the said securities for issue, offer, sale or trade under the Blue
Sky or other securities laws of any of such states and in connection therewith
to execute, acknowledge, verify, deliver, file and cause to be published
applications, reports, consents to service of process, appointments of attorneys
to receive service of process and other papers and instruments which may be
required under such laws, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign his name in his
capacity as an Officer, Director or Authorized Representative in the United
States or in any other capacity with respect to this Registration Statement and
any registration statement in respect of the Securities that is to be effective
upon filing pursuant to Rule 462(b) (collectively, the "Registration Statement")
and/or such other form or forms as may be appropriate to be filed with the
Commission or under or in connection with any Blue Sky laws or other securities
laws of any state of the United States of America or with such other regulatory
bodies and agencies as any of them may deem appropriate in respect of the
Securities, and with respect to any and all amendments, including post-effective
amendments, to this Registration Statement and to any and all instruments and
documents filed as part of or in connection with this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 21, 2002.
Signature Title
--------- -----
/s/ Dr. J.G.S. Buchanan Director (Principal Executive Officer)
- ----------------------------------------
Dr. J.G.S. Buchanan
/s/ D.P. Chapman Director
- ----------------------------------------
D.P. Chapman
/s/ A.B. Hayward Director (Principal Financial and Accounting
- ---------------------------------------- Officer)
A.B. Hayward
/s/ D.B. Pinkert Authorized Representative in the United
- ---------------------------------------- States
D.B. Pinkert
II-11
SIGNATURES OF BP CANADA
Pursuant to the requirements of the Securities Act of 1933, BP Canada
Finance Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorised, in Calgary, Alberta, Canada on February 21, 2002.
By: /s/ Dennis A. Roemmich
---------------------------------
Name: Dennis A. Roemmich
Title: President
KNOW ALL MEN BY THESE PRESENTS, that the sole director and each officer
whose signature appears below severally constitutes and appoints the sole
director and each officer whose signature appears below (with full power to each
of them to act alone), his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities to do any and all things and execute any
and all instruments that such attorney may deem necessary or advisable under the
Securities Act of 1933 (the "Securities Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of the Securities and
any securities or Blue Sky law of any of the states of the United States of
America in order to effect the registration or qualification (or exemption
therefrom) of the said securities for issue, offer, sale or trade under the Blue
Sky or other securities laws of any of such states and in connection therewith
to execute, acknowledge, verify, deliver, file and cause to be published
applications, reports, consents to service of process, appointments of attorneys
to receive service of process and other papers and instruments which may be
required under such laws, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign his name in his
capacity as an Officer, Director or Authorized Representative in the United
States or in any other capacity with respect to this Registration Statement and
any registration statement in respect of the Securities that is to be effective
upon filing pursuant to Rule 462(b) (collectively, the "Registration Statement")
and/or such other form or forms as may be appropriate to be filed with the
Commission or under or in connection with any Blue Sky laws or other securities
laws of any state of the United States of America or with such other regulatory
bodies and agencies as any of them may deem appropriate in respect of the
Securities, and with respect to any and all amendments, including post-effective
amendments, to this Registration Statement and to any and all instruments and
documents filed as part of or in connection with this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 21, 2002.
Signature Title
--------- -----
/s/ Dennis A. Roemmich President (Principal Executive Officer)
- -----------------------------------------------
Dennis A. Roemmich
/s/ Glenn G. Wickerson Sole Director, Vice President and Treasurer
- ----------------------------------------------- (Principal Financial and Accounting Officer)
Glenn G. Wickerson
/s/ D.B. Pinkert Authorized Representative in the United States
- -----------------------------------------------
D.B. Pinkert
II-12
SIGNATURES OF BP AUSTRALIA
Pursuant to the requirements of the Securities Act of 1933, BP
Australia Capital Markets Limited certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form F-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorised, in Melbourne, Australia on February 21,
2002.
By: /s/ R.W. Morrison
----------------------------------
Name: R. W. Morrison
Title: Company Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below severally constitutes and appoints each person listed below or
R.W. Morrison, Company Secretary (with full power to each of them to act alone),
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to do any and all things and execute any and all
instruments that such attorney may deem necessary or advisable under the
Securities Act of 1933 (the "Securities Act"), and any rules, regulations and
requirements of the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of the Securities and
any securities or Blue Sky law of any of the states of the United States of
America in order to effect the registration or qualification (or exemption
therefrom) of the said securities for issue, offer, sale or trade under the Blue
Sky or other securities laws of any of such states and in connection therewith
to execute, acknowledge, verify, deliver, file and cause to be published
applications, reports, consents to service of process, appointments of attorneys
to receive service of process and other papers and instruments which may be
required under such laws, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign his name in his
capacity as an Officer, Director or Authorized Representative in the United
States or in any other capacity with respect to this Registration Statement and
any registration statement in respect of the Securities that is to be effective
upon filing pursuant to Rule 462(b) (collectively, the "Registration Statement")
and/or such other form or forms as may be appropriate to be filed with the
Commission or under or in connection with any Blue Sky laws or other securities
laws of any state of the United States of America or with such other regulatory
bodies and agencies as any of them may deem appropriate in respect of the
Securities, and with respect to any and all amendments, including post-effective
amendments, to this Registration Statement and to any and all instruments and
documents filed as part of or in connection with this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 21, 2002.
Signature Title
--------- -----
/s/ G.D. Bourne Regional President and Managing Director
- ----------------------------------------------- (Principal Executive Officer)
G. D. Bourne
Chief Financial and Accounting Officer
/s/ J. Norman (Principal Financial and Accounting Officer)
- -----------------------------------------------
J. Norman
/s/ G.R. Hueston Director
- -----------------------------------------------
G. R. Hueston
/s/ R. Warnock Director
- -----------------------------------------------
R. Warnock
II-13
/s/ R.M. Harding Director
- -----------------------------------------------
R. M. Harding
/s/ K.M. Lucas Director
- -----------------------------------------------
K. M. Lucas
/s/ G. Nicolaides Director
- -----------------------------------------------
G. Nicolaides
/s/ D.B. Pinkert Authorized Representative in
- ----------------------------------------------- the United States
D. B. Pinkert
II-14
INDEX TO EXHIBITS
Exhibit Number Description of Document
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1.1 Form of Purchase Agreement for Guaranteed Debt Securities.
4.1 Form of Indenture, among BP Capital Markets America Inc., BP p.l.c. and JPMorgan Chase Bank.
4.2 Form of Indenture among BP Capital Markets p.l.c., BP p.l.c. and JPMorgan Chase Bank.
4.3 Form of Indenture among BP Canada Finance Company, BP p.l.c. and JPMorgan Chase Bank.
4.4 Form of Indenture among BP Australia Capital Markets Limited, BP p.l.c. and JPMorgan Chase
Bank.
4.5 Form of Debt Securities for BP Capital Markets America Inc. and Guarantees relating thereto
(included in Exhibit 4.1).
4.6 Form of Debt Securities for BP Capital Markets p.l.c. and Guarantees relating thereto
(included in Exhibit 4.2).
4.7 Form of Debt Securities for BP Canada Finance Company and Guarantees relating thereto
(included in Exhibit 4.3).
4.8 Form of Debt Securities for BP Australia Capital Markets Limited and Guarantees relating
thereto (included in Exhibit 4.4).
4.9 Memorandum and Articles of Association of BP p.l.c. (incorporated by reference to Exhibit 1
filed in BP p.l.c.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2000).
5.1 Opinion of Group General Counsel of BP p.l.c., as to the validity of the Guaranteed Debt
Securities of BP Capital Markets p.l.c. and the Guarantees as to certain matters of English
law.
5.2 Opinion of Assistant General Counsel of BP p.l.c., U.S. Counsel to BP p.l.c., BP Capital
Markets America Inc., BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia
Capital Markets Limited, as to the validity of (i) the Guaranteed Debt Securities of BP
Capital Markets America Inc. and the Guarantees issued in connection therewith and (ii) the
Guaranteed Debt Securities of BP Capital Markets p.l.c., BP Canada Finance Company and BP
Australia Capital Markets Limited, each as to certain matters of United States law.
5.3 Opinion of the Senior Legal Counsel of BP Canada Energy Company as to the validity of the
Guaranteed Debt Securities of BP Canada Finance Company and the Guarantees as to certain
matters of Canadian law.
5.4 Opinion of the Managing Legal Adviser of BP Australia Capital Markets Limited as to the validity
of the Guaranteed Debt Securities of BP Australia Capital Markets Limited and the Guarantees as
to certain matters of Australian law.
8.1 Opinion of Group General Counsel of BP p.l.c. as to certain matters of U.K. taxation
(included in Exhibit 5.1 above).
8.2 Opinion of Sullivan & Cromwell, U.S. counsel to BP p.l.c., BP Capital Markets America Inc.,
BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia Capital Markets
Limited., as to certain matters of U.S. taxation.
8.3 Opinion of the Senior Legal Counsel of BP Canada Energy Company as to certain matters of
Canadian taxation.
8.4 Opinion of Mallesons Stephen Jaques as to certain matters of Australian taxation.
23.1 Consent of Ernst & Young LLP, independent auditor.
23.2 Consent of Ernst & Young LLP, independent auditor.
23.3 Consent of Group General Counsel of BP p.l.c. (included in Exhibit 5.1 above).
23.4 Consent of the Assistant General Counsel of BP p.l.c. (included in Exhibit 5.2 above).
23.5 Consent of the Senior Legal Counsel of BP Canada Energy Company (included in Exhibit 5.3
above).
23.6 Consent of the Managing Legal Adviser of BP Australia Capital Markets Limited (included in
Exhibit 5.4 above).
23.7 Consent of Sullivan & Cromwell, U.S. counsel to BP p.l.c., BP Capital Markets America Inc.,
BP Capital Markets p.l.c., BP Canada Finance Company and BP Australia Capital Markets
Limited (included in Exhibit 8.2 above).
23.8 Consent of the Senior Legal Counsel of BP Canada Energy Company (included in Exhibit 8.3
above).
Exhibit Number Description of Document
-------------- -----------------------------------------------------------------------------------
23.9 Consent of Mallesons Stephen Jaques (included in Exhibit 8.4 above).
24.1 Powers of attorney (included as part of the signature pages hereof).
25.1 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.1 above.
25.2 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.2 above.
25.3 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.3 above.
25.4 Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.4 above.
25.5 Statement of eligibility of Trustee on Form T-1 with respect to the Guarantees of
BP p.l.c.