EX-4.7



 





Exhibit 4.7




Rules of the Rio Tinto Limited



Mining Companies




Comparative Plan 2004




Shareholders’ Approval: 22 April 2004




Directors’ Adoption: 30 January 2004




Expiry Date: 22 April 2014




Stock Exchange Centre

530 Collins Street

Melbourne VIC 3000

Tel 61 3 9614 1011

Fax 61 3 9614 4661

www.aar.com.au




© Copyright Allens Arthur Robinson 2007





 









 








Rules of the Rio Tinto Limited Mining 

Companies Comparative Plan 2004




 





	 	 	 	 	 
	Table of Contents	 	 
	 	 	 	 	 
	1.
	 	Definitions and Interpretation	 	1
	2.
	 	Administration of the Plan	 	2
	3.
	 	Eligibility	 	2
	4.
	 	Performance Conditions and Awards	 	2
	5.
	 	Termination of Employment	 	3
	6.
	 	Takeover or reconstruction	 	4
	7.
	 	Variation of Conditional Awards	 	5
	8.
	 	Plan Limits	 	5
	9.
	 	Variation of Plan Rules	 	6
	10.
	 	Miscellaneous	 	6
	11.
	 	Terms of employment	 	7
	12.
	 	Governing Law	 	8






      





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Companies Comparative Plan 2004




 





Rio Tinto Limited




Mining Companies Comparative Plan 2004





	1.	 	Definitions and Interpretation





      





	1.1	 	In this Plan unless the context otherwise requires:
	 
	 	 	ASIC means Australian Securities and Investments Commission.
	 
	 	 	Award means the receipt of Shares as described in Rule 4.4.
	 
	 	 	Business Day means a day on which the Australian Stock Exchange is open for the transaction
of business.
	 
	 	 	Committee means the Remuneration Committee of the board of directors of the Company as
constituted from time to time (or if there is no such Remuneration Committee, means the
board of directors of the Company).
	 
	 	 	Company means Rio Tinto Limited (ACN 004 458 404).
	 
	 	 	Conditional Award means an award to a Participant of a specified number of Shares subject
to satisfaction of a Performance Condition, and subject to the Committee’s discretion under
Rule 4.5.
	 
	 	 	Conditional Award Letter means a notification of participation in the Plan given under Rule
4.1.
	 
	 	 	Corporations Act means the Corporation Act 2001 (Cth).
	 
	 	 	Group means the Company and all of its Subsidiaries.
	 
	 	 	Minimum Shareholding Threshold means the number of Shares required to be held by a
Participant who is a director of the Company or a product group chief executive in the Rio
Tinto Group, as determined in accordance with Rule 4.7.
	 
	 	 	Participant means a person to whom a Conditional Award Letter has been given under Rule
4.1.
	 
	 	 	Performance Condition means a condition set by the Committee and notified to a Participant
in a Conditional Award Letter.
	 
	 	 	Performance Period means the period over which a Performance Condition is to be satisfied.
	 
	 	 	Plan or MCCP means the Rio Tinto Limited Mining Companies Comparative Plan 2004 as herein
set out but subject to any alterations or additions made under Rule 9 below.
	 
	 	 	Rio Tinto Group means the Group and Rio Tinto plc and its subsidiaries.
	 
	 	 	Shares means ordinary shares in the Company.
	 
	 	 	Subsidiary means a body corporate which is a subsidiary of the Company within the meaning
of the Corporations Act.





      





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	1.2	 	Any reference in the Plan to any enactment includes a reference to that enactment as from
time to time modified extended or re-enacted.
	 
	2.	 	Administration of the Plan





      





	2.1	 	The Committee is responsible for the administration of the Plan. Subject to the express
provisions of the Plan, the Committee may prescribe, amend and rescind the rules and
regulations relating to it and make all determinations necessary for its administration. The
determination of the Committee on all matters assigned to it under the Plan shall be
conclusive.
	 
	2.2	 	Notwithstanding any other provision of the Plan, the operation of the Plan shall remain at
the entire discretion of the Committee and shall not confer any rights whatsoever on
Participants.
	 
	3.	 	Eligibility





      





	 	 	Any executive director, employee or class of employees of the Company or a Subsidiary who
is approved by the Committee shall be eligible to participate in the Plan in respect of a
particular Performance Period.
	 
	4.	 	Performance Conditions and Awards





      





	4.1	 	The Committee may from time to time select any eligible director or employee or class of
employees for participation in the Plan and authorise the issue of a Conditional Award Letter
to him. If the Committee authorises participation in the Plan by an eligible director or
employee who joins the Group later than 1 January in the first year of a Performance Period,
his Conditional Award will be reduced pro rata to his participation during such first year.
	 
	4.2	 	The Committee shall make each Conditional Award subject to a Performance Condition, the
achievement (or non-achievement) of which will determine the number of Shares awarded to a
Participant. The full terms of the Performance Condition shall be set out in the Conditional
Award Letter.
	 
	4.3	 	The value of the number of Shares subject to a Conditional Award shall not exceed 200% of a
Participant’s basic rate of pay at 1 March of the first year of the relevant Performance
Period. The value of the Shares for this purpose shall be determined by taking the average of
the market price of Shares (as derived from the Official List of the Australian Stock
Exchange) for each Friday in the year immediately preceding the commencement of the relevant
Performance Period, or in such other way as the Committee may determine.
	 
	4.4	 	After the end of a Performance Period, the number of Shares which fall to be awarded to each
Participant shall be calculated in accordance with the Performance Condition, and unless the
Committee determines otherwise under Rule 4.5, and subject to Rule 5, the Participant shall
receive the appropriate number of Shares (or an equivalent amount in cash) after first
deducting any sums required to be withheld on account of such delivery in





 





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	 	 	respect of the Participant’s tax or social security obligations, or after making any other
arrangements which may appear suitable to discharge those obligations.
	 
	4.5	 	The Committee may determine in its absolute discretion that the performance of a Participant
or of the Group does not justify the making of all or any part of an Award.
	 
	4.6	 	Any Participant who is a director of the Company or a product group chief executive in the
Rio Tinto Group shall, subject to Rule 5.4 and Rule 6, hold the Shares delivered to him in
accordance with Rule 4.4, or such lesser number of Shares as (taking account of any shares
which he already holds and any other Shares in which he is shown as being interested in the
Company’s Report and Accounts, excluding any interest in Shares held by an employee benefit
trust) will make his shareholding equal to the Minimum Shareholding Threshold. He shall
thereafter continue to hold Shares equal to the Minimum Shareholding Threshold, as determined
by the Committee from time to time, until the Committee shall determine otherwise, subject to
any variation under Rule 7.
	 
	4.7	 	For the purposes of Rule 4.6 above, the Minimum Shareholding Threshold is the number of
Shares equal in value to two times the Participant’s basic salary on 1 March in the year in
which the Shares are awarded to him, or such other number as the Committee may determine from
time to time. The value of the Shares for this purpose shall be determined in the manner
described in Rule 4.3.
	 
	4.8	 	Any Participant who is a director of the Company or a product group chief executive of the
Rio Tinto Group at the time a Conditional Award Letter is delivered to him and who is entitled
to receive a number of Shares (or an equivalent amount in cash in lieu of those Shares) under
the Plan (for the avoidance of doubt, as modified or reduced pro-rata under Rule 5 or Rule 6
if applicable), shall also be paid an amount of cash from the Company. The amount of cash to
be so paid will be an amount equal to the aggregate cash amount of dividends (excluding any
imputed or associated tax credits or rebates, such as any Australian franking credits, in
relation to those dividends) that would have been paid to a holder of the relevant number of
Shares in respect of the financial years comprised in the Performance Period, but excluding
any dividends actually paid in respect of those Shares after their issue or transfer to the
Participant and after first deducting any sums required to be withheld on account of such
payment in respect of the Participant’s tax or social security obligations.
	 
	5.	 	Termination of Employment




 






	5.1	 	Subject to Rule 5.2, if a Participant ceases to be employed within the Group during a
Performance Period no Award will be made to him in respect of that Performance Period, unless
the Committee shall in its absolute discretion decide otherwise.






	5.2	 	If a Participant ceases to be employed within the Group during a Performance Period by reason
of:






	 	(a)	 	ill-health, injury, or disability (as determined by the Participant’s
employer);
	 
	 	(b)	 	redundancy;
	 
	 	(c)	 	transfer to Rio Tinto plc or one of its subsidiaries;





 





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	 	(d)	 	retirement (by agreement with the Participant’s employer);
	 
	 	(e)	 	his employing company ceasing to be under the control of the Company; or
	 
	 	(f)	 	a transfer of the undertaking in which the Participant works to a person who
is neither under the control of the Company nor a member of the Group;






	 	 	he may receive an Award in accordance with Rule 4.4, provided that if his employment
terminates during the first 12 months of a Performance Period, the Award will be reduced
pro rata.
	 
	5.3	 	If a Participant dies before the end of a Performance Period, Shares will be delivered to his
personal representatives as soon as reasonably practicable. The number of Shares delivered
will be the higher of:






	 	(a)	 	the number of Shares which would be delivered if the Performance Condition
was satisfied at the median level ; and
	 
	 	(b)	 	the number of Shares which would be delivered if the Performance Period ended
on the date of death, and performance were measured over the shortened Performance
Period,






	 	 	provided that if a Participant dies during the first 12 months of a Performance Period, the
number of Shares will be reduced pro rata.
	 
	5.4	 	The Minimum Shareholding Threshold in Rule 4.6 shall not apply to Awards made under this Rule
5.
	 
	5.5	 	If the Participant ceases to be employed within the Group for any reason following the end of
a Performance Period he will remain eligible to receive an Award, unless he joins an employer
which is a competitor of the Group.
	 
	6.	 	Takeover or reconstruction





      





	6.1	 	In the event that any person obtains control of the Company, whether or not as a result of
making a general offer to acquire shares in the Company, or if the Company is wound up, all
outstanding Performance Periods will be deemed to end on the date on which control is
obtained, or the winding up becomes effective, and (subject to Rule 6.2 and 6.3) Awards will
be made calculated by reference to the extent to which the relevant Performance Condition has
been satisfied at that date.






	6.2	 	If a Performance Period is deemed to end during the first 12 months, any Awards will be
reduced pro rata.






	6.3	 	The Committee may determine that Rule 6.1 will not apply, but that instead all Conditional
Awards will be automatically replaced by equivalent new conditional awards over shares in any
company which acquires control of the Company (provided that the Committee has first obtained
the agreement of that acquiring company).






	6.4	 	Rule 4.6 shall not apply to Awards made under this Rule 6.





      




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	7.	 	Variation of Conditional Awards





      





	7.1	 	The Committee may make such adjustments as it considers appropriate, if any, to:






	 	(a)	 	the number of Shares subject to a Conditional Award;
	 
	 	(b)	 	the terms of a Performance Condition;
	 
	 	(c)	 	the number of Shares which a Participant is obliged to hold pursuant to Rule
4.7; and/or
	 
	 	(d)	 	any payment to be made under Rule 4.8,






	 	 	in the event of any of the circumstances set out in Rule 7.2.
	 
	7.2	 	The circumstances are:






	 	(a)	 	a variation in the equity share capital of the Company, including a
capitalisation or rights issue, sub-division, consolidation or reduction of share
capital, or a demerger (in whatever form);
	 
	 	(b)	 	a special distribution, including a distribution in specie, made by the
Company to its shareholders;
	 
	 	(c)	 	a takeover, demerger or other reconstruction (excluding liquidation or
receivership) of any other company with which the Company’s performance is compared;
	 
	 	(d)	 	any other circumstances whatsoever which causes the Committee to consider
that a changed Performance Condition would be a fairer measure of performance, and
would be no more difficult to satisfy, or that the Performance Condition should be
waived.






	7.3	 	After any adjustment under Rule 7.1, notice shall be given to any Participant affected
thereby.
	 
	8.	 	Plan Limits





      





	8.1	 	The number of Shares which may be allocated under the Plan on any day will not exceed 10% of
the ordinary share capital of the Company on issue immediately before that day, when added to
the total number of Shares which have been allocated in the previous 10 years under the Plan
and any other employee share scheme adopted by the Company.






	8.2	 	The number of Shares which may be allocated under the Plan on any day will not exceed 5% of
the ordinary share capital of the Company on issue immediately before that day when added to
the total number of Shares which have been allocated in the previous 10 years under the Plan
and any other discretionary share scheme adopted by the Company.






	8.3	 	The number of Shares which may be allocated under the Plan on any day will not exceed the
maximum number permitted under any applicable ASIC Class Order or other applicable instrument
from the ASIC providing relief from the prospectus regime of the Corporations Act.





      




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	8.4	 	Allocate means, in relation to any employee option scheme, placing unissued shares under
option and, in relation to other types of employee share scheme, the issue and allotment of
shares.






	9.	 	Variation of Plan Rules





      





	9.1	 	Subject to the Corporations Act and the Listing Rules of the Australian Stock Exchange, the
Committee has power to make such alterations, variations, insertions, deletions or
modifications (variations) to all or any part of the rules of the Plan as the Committee thinks
fit, provided that the net effect of such variation is not to prejudice the rights and
entitlements of a Participant subsisting prior to the making of the amendment.
	 
	9.2	 	After making any variation, the Directors will give written notice to any Participant
affected by the variation.
	 
	10.	 	Miscellaneous





      





	10.1	 	By participating in the Plan the Participant acknowledges that the Committee, the board of
the Company and each company in the Group may use and disclose personal information relating
to Participants for all purposes which relate to the management and administration of the Plan
including, without limitation:






	 	(a)	 	disclosure of personal information between companies in the Group and to
other companies in the Rio Tinto Group;
	 
	 	(b)	 	disclosure of personal information by companies in the Group to external
service providers including banks, Plan brokers or administrators, share registries,
professional advisers and mail houses; and
	 
	 	(c)	 	disclosure of personal information to future purchasers of the Company or the
business in which the Participant works,






	 	 	in each case whether or not the personal information is transferred from one country to
another country, and the Participant consents to all such use and disclosure of all such
personal information.
	 
	10.2	 	In the event of any dispute or disagreement as to the interpretation of the Plan, or as to
any question or right arising from or related to the Plan, the decision of the Committee shall
be final and binding upon all persons.
	 
	10.3	 	The Committee may suspend or terminate the Plan at any time without incurring any liability
to any Participant. If this is not done, the Plan will terminate on 22 April 2014 but without
prejudice to Awards to be made in relation to Performance Periods which have not yet ended.
	 
	10.4	 	The Company will pay the costs of introducing and administering the Plan.
	 
	10.5	 	Where Shares are to be transferred to a Participant in satisfaction of an Award, the
Participant is entitled to all rights attaching to the Shares by reference to a record date on
or after the transfer date, but, subject to Rule 4.8, is not entitled to rights before that
date.





      




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	10.6	 	The Company may satisfy Awards by the issue of Shares or by procuring the transfer of Shares
or in any other way. All allotments, issues and transfers of Shares will be subject to any
necessary consents under any relevant enactments or regulations for the time being in force in
Australia or elsewhere. The Participant will be responsible for complying with any
requirements to be fulfilled in order to obtain or avoid the necessity for any such consent.






	10.7	 	Any Shares acquired in satisfaction of an Award will be subject to the Constitution of the
Company from time to time in force.






	10.8	 	If and so long as the Shares are listed on the Official List of the Australian Stock
Exchange, the Company will apply for listing of any Shares issued pursuant to the Plan as soon
as practicable after their allotment.






	11.	 	Terms of employment





      





	11.1	 	For the purposes of this Rule, “Employee” means any Participant or any other employee of a
company in the Group.






	11.2	 	This Rule applies:






	 	(a)	 	whether a company in the Group has full discretion in the operation of the
Plan, or whether a company in the Group could be regarded as being subject to any
obligations in the operation of the Plan;
	 
	 	(b)	 	during an Employee’s employment or employment relationship; and
	 
	 	(c)	 	after the termination of an Employee’s employment or employment relationship,
whether the termination is lawful or unlawful.






	11.3	 	Nothing in the Plan or the operation of the Plan forms part of the contract of employment or
employment relationship of an Employee. The rights and obligations arising from the
employment relationship between the Employee and the company in the Group that is his employer
are separate from, and are not affected by, the Plan. Participation in the Plan does not
create any right to, or expectation of, continued employment or a continued employment
relationship.






	11.4	 	The grant of Conditional Awards on a particular basis in any year does not create any right
to or expectation of the grant of Conditional Awards on the same basis, or at all, in any
future year.






	11.5	 	No Employee is entitled to participate in the Plan, or be considered for participation in it,
at a particular level or at all. Participation in one operation of the Plan does not imply any
right to participate, or to be considered for participation in any later operation of the
Plan.






	11.6	 	Without prejudice to an Employee’s rights under a Conditional Award subject to and in
accordance with the express terms of the Plan and the Performance Conditions, no Employee has
any rights in respect of the exercise or omission to exercise any discretion, or the making or
omission to make any decision, relating to the Conditional Award. Any and all discretions,
decisions or omissions relating to the Conditional Award may operate to the disadvantage of
the Employee, even if this could be regarded as capricious or unreasonable, or could be
regarded as in breach of any implied term between the





      




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	 	 	Employee and the company in the Group
that is his employer, including any implied duty of trust and confidence. Any such implied
term is excluded and overridden by this Rule.
	 
	11.7	 	No Employee has any right to compensation for any loss in relation to the Plan, including:






	 	(a)	 	any loss or reduction of any rights or expectations under the Plan in any
circumstances or for any reason (including lawful or unlawful termination of
employment or the employment relationship);
	 
	 	(b)	 	any exercise of a discretion or a decision taken in relation to a Conditional
Award or to the Plan, or any failure to exercise a discretion or take a decision; or
	 
	 	(c)	 	the operation, suspension, termination or amendment of the Plan.






	11.8	 	Participation in the Plan is permitted only on the basis that the Participant accepts all the
provisions of the Plan, including in particular this Rule. By participating in the Plan, an
Employee waives all rights under the Plan, other than the rights under a Conditional Award
subject to and in accordance with the express terms of the Plan and the Performance
Conditions, in consideration for, and as a condition of, the grant of a Conditional Award
under the Plan.






	11.9	 	Nothing in the Plan confers any benefit, right or expectation on a person who is not an
Employee. No such third party has any rights under any legislation to enforce any term of the
Plan. This does not affect any other right or remedy of a third party which may exist.






	11.10	 	Nothing in the Plan confers any responsibility or liability on any member of the Group or
any of their directors, officers, employees, representatives or agents in respect of any
taxation liabilities of any Participant.






	11.11	 	Each of the provisions of this Rule is entirely separate and independent from each of the
other provisions. To the extent that any provision is found to be invalid then it will be
deemed never to have been part of the Plan and to the extent that it is possible to do so,
this will not affect the validity or enforceability of any of the remaining provisions.






	12.	 	Governing Law





      





	 	 	The law of Victoria governs the Plan and all Awards and their construction.





      




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