Document:

EX-4.5

 

Exhibit 4.5

RIO TINTO PLC

RULES OF THE RIO TINTO MANAGEMENT SHARE PLAN 2007

	 	 	 
	Directors’ Adoption:

	 	13 March 2007
	Expiry Date:

	 	12 March 2017

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

Ref Anne Croft

 

 

Table of Contents

	 	 	 	 	 	 	 
	Contents	 	Page
	 
	 	 	 	 	 	 
	1

	 	Granting Awards
	 	 	1	 
	2

	 	Awards
	 	 	2	 
	3

	 	Conditional Awards and Matching Awards
	 	 	3	 
	4

	 	Vesting of Awards
	 	 	3	 
	5

	 	Consequences of Vesting
	 	 	4	 
	6

	 	Leaving the Group before Vesting
	 	 	4	 
	7

	 	Variations in share capital, demergers and special distributions
	 	 	6	 
	8

	 	Takeovers and restructurings
	 	 	6	 
	9

	 	Exchange of Awards
	 	 	8	 
	10

	 	General
	 	 	8	 
	11

	 	Changing the Plan and termination
	 	 	11	 
	12

	 	Governing law and jurisdiction
	 	 	11	 
	13

	 	Definitions
	 	 	11	 

 

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Rules of the Rio Tinto Management Share Plan 2007

	1	 	Granting Awards
	 
	1.1	 	Shares subject to Awards
	 
	 	 	Awards may only be satisfied by the transfer of existing Shares. No new Shares may be issued
under the Plan.
	 
	1.2	 	Eligibility
	 
	 	 	The Directors may grant an Award to any employee of the Group excluding an executive
director of the Company or a product group chief executive.
	 
	1.3	 	Timing of Award
	 
	 	 	Awards may not be granted at any time after the Expiry Date and Awards may only be granted
within 42 days starting on any of the following:

	 	1.3.1	 	the day after the announcement of the Company’s results;
	 
	 	1.3.2	 	any day on which the Directors resolve that exceptional circumstances exist
which justify the grant of Awards; or
	 
	 	1.3.3	 	any day on which changes to the legislation or regulations affecting share
plans are announced, effected or made; or
	 
	 	1.3.4	 	the lifting of Dealing Restrictions which prevented the granting of Awards
during any period specified above.

	1.4	 	Vesting Conditions
	 
	 	 	When granting an Award, the Directors may make its Vesting conditional on the satisfaction
of one or more conditions. A Vesting Condition must be specified at the time the Award is
made and may provide that an Award will lapse if a Vesting Condition is not satisfied. The
Directors may waive or change a Vesting Condition in accordance with its terms or if
anything happens which causes them reasonably to consider it appropriate. Notwithstanding
anything else in the Plan, an Award will only Vest to the extent that any Vesting Condition
is satisfied or waived.
	 
	1.5	 	Matching Awards
	 
	 	 	The Directors may establish conditions for and grant Matching Awards at any time during the
Vesting Period for a Conditional Award
	 
	 	 	The Vesting of a Matching Award is conditional on the Participant retaining the Shares which
are subject to the Conditional Award to which the Matching Award is linked, on terms
specified at the time the Matching Award is granted, and is subject to such other Vesting
Conditions as the Directors think fit.
	 
	1.6	 	Number of Shares the Subject of an Award

	 	1.6.1	 	The Directors must, at the time of the grant of a Conditional Award or a
Matching Award, determine the number of Shares subject to the Award (the Base Number of
Shares).

 

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	 	1.6.2	 	The Directors may, at the time of the grant of such an Award, also determine
that the Award includes a right to receive, upon Vesting of some or all of the Base
Number of Shares, a number of Additional Shares calculated in accordance with the
following formula:
	 
	 	 	 	X = D / P, rounded down to the nearest whole number, where
	 
	 	 	 	X is the number of Additional Shares
	 
	 	 	 	D is the aggregate cash amount of all Dividends which would have been paid to the
relevant Participant in respect of the Base Number of Shares subject to the Award
that have Vested, if that number of Shares had been registered in the name of the
relevant Participant on the date of grant of the Award.
	 
	 	 	 	P is the average of the closing price of Shares on the London Stock Exchange over
the five Business Days ending on the date of the Vesting of the Award.

	1.7	 	Award certificates
	 
	 	 	Each Participant will receive a certificate setting out the terms of the Award as soon as
practicable after the Award is made. The certificate may be the deed referred to in 2.1
(Terms of Awards) or any other document. If any certificate is lost or damaged the Company
may replace it on such terms as it decides.
	 
	1.8	 	No payment
	 
	 	 	A Participant is not required to pay for the grant of any Award.

	 
	1.9	 	Disclaimer of Award
	 
	 	 	Any Participant may disclaim all or part of his Award within 30 days after the Award is
notified to him, by giving written notice to any person nominated by the Company. If this
happens, the Award will be deemed never to have been granted. A Participant is not required
to pay for the disclaimer.
	 
	2	 	Awards
	 
	2.1	 	Terms of Awards
	 
	 	 	Awards are subject to the rules of the Plan and any conditions specified at the time of
grant and must be granted by deed. The terms of the Award, as determined by the Directors,
must be specified in the deed and must include:

	 	2.1.1	 	whether the Award is:

	 	(i)	 	a Conditional Award; and/or
	 
	 	(ii)	 	a Matching Award linked to a Conditional Award.

	 	2.1.2	 	the Base number of Shares subject to the Award;
	 
	 	2.1.3	 	whether the Award includes a right to receive any Additional Shares;
	 
	 	2.1.4	 	any Vesting Condition;
	 
	 	2.1.5	 	the terms of a Matching Award, if made at the time as the grant of the
Conditional Award, including the Retention Period and the number of Shares which must
be

 

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	 	 	 	retained. Any Matching Award made subsequent to the time of the grant of the
Conditional Award will be specified separately;
	 
	 	2.1.6	 	the date of Vesting, unless specified in a Vesting Condition.

	2.2	 	Elections
	 
	 	 	The Participant must enter into any elections required by the Company, including elections
under Part 7 of the Income Tax (Earnings and Pensions) Act 2003 and elections to transfer
any liability, or agreements to pay, national insurance contributions. If he does not do so
within a period specified by the Company, the Award will lapse at the end of that period.
	 
	3	 	Conditional Awards and Matching Awards
	 
	3.1	 	Rights
	 
	 	 	A Participant shall not be entitled to vote, to receive dividends or to have any other
rights of a shareholder in respect of Shares subject to a Conditional Award or a Matching
Award until the Shares are transferred to the Participant.
	 
	3.2	 	Transfer
	 
	 	 	A Participant may not transfer, assign or otherwise dispose of a Conditional Award or a
Matching Award or any rights in respect of it. If he does, whether voluntarily or
involuntarily, then it will immediately lapse. This rule 3.2 does not apply to the
transmission of a Conditional Award or Matching Award on the death of a Participant to his
personal representatives;
	 
	4	 	Vesting of Awards
	 
	4.1	 	Timing of Vesting — Award subject to a time-based Vesting Condition
	 
	 	 	Where an Award is subject to a Vesting Condition, which is not dependent on performance but
only on the passing of a period of time, the Award Vests subject to rules 6 (Leaving the
Group before Vesting) and 8 (Takeovers and restructurings), on the date of Vesting set by
the Directors on the grant of the Award or, if on that date a Dealing Restriction applies to
a Participant, the first date on which it ceases to apply to him.
	 
	4.2	 	Timing of Vesting — Award subject to performance-based Vesting Condition
	 
	 	 	Where an Award is subject to a Vesting Condition which is based on performance, as soon as
reasonably practicable after the end of the Vesting Period, the Directors will determine
whether and to what extent the Vesting Condition has been satisfied and how many Shares Vest
for each Award. The Award Vests, to the extent determined, subject to rules 6 (Leaving the
Group before Vesting) and 8 (Takeovers and restructurings), on the date on which the
Directors make their determination or, if on that date a Dealing Restriction applies to a
Participant, the first date on which it ceases to apply to him.
	 
	4.3	 	Time of Vesting — Matching Award
	 
	 	 	Where an Award Vests under rule 4.1 or 4.2 and is linked to a Matching Award, the number of
Shares in respect of the Matching Award capable of Vesting is determined at the same time.
Those Shares Vest at the end of the Retention Period, subject to any applicable Vesting
Condition, or, if on that date a Dealing Restriction applies to a Participant, the first

 

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	 	 	date on which it ceases to apply to him. The Matching Award lapses if the Participant
disposes of the Vested Shares before the end of the Retention Period (other than for the
purposes of discharging a liability to tax in respect of the Vested Shares) unless the
Directors determine otherwise.

	4.4	 	Time of Vesting — Additional Shares
	 
	 	 	On the Vesting of an Award which includes the right to receive Additional Shares, the number
of Additional Shares Vesting shall be calculated as soon as practicable.
	 
	4.5	 	Lapse
	 
	 	 	To the extent any Vesting Condition is not satisfied the Award lapses, unless otherwise
specified in the Vesting Condition. If an Award lapses under the Plan it cannot Vest and a
Participant has no rights in respect of it.
	 
	5	 	Consequences of Vesting
	 
	5.1	 	Conditional Award
	 
	 	 	Within 30 days of Vesting of a Conditional Award or a Matching Award, the Company will
arrange (subject to rule 5.2 (Withholding)) for the transfer to or to the order of the
Participant of the number of Shares in respect of which the Award has Vested.
	 
	5.2	 	Withholding
	 
	 	 	The Company, any employing company or trustee of any employee benefit trust may withhold
such amount and make such arrangements as it considers necessary to meet any liability to
taxation or social security contributions in respect of Awards. These arrangements may
include the sale or reduction in number of any Shares unless the Participant discharges the
liability himself.
	 
	6	 	Leaving the Group before Vesting
	 
	6.1	 	General rule on leaving employment
	 
	 	 	Unless rule 6.2 applies, an Award which has not Vested will lapse on the date the
Participant ceases to be an employee of a Member of the Group.
	 
	6.2	 	Leaving in exceptional circumstances

	 	6.2.1	 	If a Participant ceases to be an employee of any Member of the Group for any
of the reasons set out below, then his Awards will Vest as described in rule 6.3 and
6.4 and lapse as to the balance. The reasons are:

	 	(i)	 	ill-health, injury or disability, as established to the
satisfaction of the Company;
	 
	 	(ii)	 	retirement with the agreement of the Participant’s employer;
	 
	 	(iii)	 	the Participant’s employing company ceasing to be under the
Control of the Company;
	 
	 	(iv)	 	a transfer of the undertaking, or the part of the undertaking,
in which the Participant works to a person which is neither under the Control
of the Company nor a Member of the Group;

 

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	 	(v)	 	redundancy;
	 
	 	(vi)	 	transfer of employment to Rio Tinto Limited or any subsidiary
of it; or
	 
	 	(vii)	 	any other reason except dismissal for misconduct, if there are
exceptional circumstances and the Directors so decide.

	 	6.2.2	 	The Directors must exercise any discretion provided for in rule 6.2.1 within
14 days after notification of the cessation of the relevant Participant’s employment
has been received by the Company. Except for the purposes of determining normal
Vesting, the Award will be treated as not lapsing until the end of the 14 day period,
or if earlier, the date on which the Directors decide not to exercise the discretion.

	6.3	 	Vesting — Award subject to a time-based Vesting Condition
	 
	 	 	Where rule 6.2 applies to an Award which is not dependent on performance but only on the
passing of a period of time, the Award does not lapse, but will Vest as soon as practicable
after the termination, The Award must be reduced pro rata to reflect the proportion of the
Vesting Period which has not elapsed.
	 
	6.4	 	Vesting — Award subject to a performance-based Vesting Condition
	 
	 	 	Where rule 6.2 applies to an Award which is subject to a performance-based Vesting
Condition, the Award does not lapse, and the extent to which it will Vest is measured in
accordance with rule 4.2at the end of the Vesting Period. However, the Directors may decide
in their discretion that the Vesting Period in respect of an Award should be treated as
ending on the date of the termination of employment, and that the Award should Vest
immediately, to the extent that the Vesting Condition has been satisfied (as determined by
the Directors in the manner specified in the Vesting Condition or in such manner as they
consider reasonable). The Award must be reduced pro rata to reflect the proportion of the
Vesting Period which has not elapsed.
	 
	6.5	 	Vesting — Matching Award
	 
	 	 	If a Conditional Award Vests under rule 6.3 or 6.4, any linked Matching Award Vests at the
same time, irrespective of any Retention Period. If a Participant’s employment terminates
after the Vesting of the Award to which a Matching Award is linked, in circumstances where
rule 6.2 applies, the Matching Award does not lapse, but Vests on the date of termination,
or if later, on the date on which the Directors decide that Rule 6.2 applies. In both cases,
the Matching Award is reduced pro rata to reflect the proportion of the Vesting Period
and/or Retention Period which has not elapsed on the date of termination.
	 
	6.6	 	Death
	 
	 	 	If a Participant dies, his Awards Vest on the date of death, subject to pro rata reduction
to reflect the proportion of the Vesting Period and/or Retention which has not elapsed on
the date of death. However, an Award which is subject to a performance-based Vesting
Condition only Vests to the extent that it has been satisfied as at the date of death. It
lapses as to the balance. The Directors will determine the extent to which the Vesting
Condition has been satisfied and the proportion as to which it will Vest in the manner
specified in the Vesting Condition or, if this is not specified in the Vesting Condition, in
such manner as they consider reasonable.

 

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	6.7	 	Additional Shares
	 
	 	 	On the Vesting of an Award which includes the right to receive Additional Shares, the number
of Additional Shares Vesting shall be calculated as soon as practicable.
	 
	6.8	 	Meaning of “ceasing to be an employee”
	 
	 	 	For the purposes of this rule 6, a Participant is not treated as ceasing to be an employee
of a Member of the Group until he ceases to be an employee of all Members of the Group on
standard employment conditions for full time employees.
	 
	7	 	Variations in share capital, demergers and special distributions
	 
	7.1	 	Adjustment of Awards
	 
	 	 	If there is:

	 	7.1.1	 	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
	 
	 	7.1.2	 	a demerger (in whatever form) or exempt distribution by virtue of Section 213
of the Income and Corporation Taxes Act 1988; or
	 
	 	7.1.3	 	a special dividend or distribution

	 	 	the Directors may adjust the number or class of Shares or securities comprised in a
Conditional Award and a Matching Award.
	 
	7.2	 	Notice
	 
	 	 	The Company may notify Participants of any adjustment made under this rule 7.
	 
	8	 	Takeovers and restructurings
	 
	8.1	 	Takeovers

	 	8.1.1	 	Where a person (or a group of persons acting in concert) obtains Control of
the Company as a result of making an offer to acquire Shares, an Award Vests, subject
to rule 8.1.3, on the date the person obtains Control but, in the case of an Award
which is subject to a performance-based Vesting Condition, only to the extent that the
Vesting Condition has been satisfied as determined by the Directors under rule 8.1.2.
The Award lapses as to the balance unless exchanged under rule 8.1.3.
	 
	 	8.1.2	 	Where an Award which is subject to a performance-based Vesting Condition Vests
under rule 8.1.1, the Directors will determine the extent to which the Vesting
Condition has been satisfied and the proportion of the Award which will Vest. In
addition, the Directors may decide that all Awards should be reduced pro rata to
reflect the acceleration of Vesting.
	 
	 	8.1.3	 	An Award will not Vest under rule 8.1.1 but will be exchanged under rule 9
(Exchange of Awards) to the extent that:

	 	(i)	 	an offer to exchange the Award is made to and accepted by a
Participant; or
	 
	 	(ii)	 	the Directors, with the consent of the Acquiring Company,
decide before the person obtains Control that the Award will be automatically
exchanged.

 

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	8.2	 	Schemes of arrangement

	 	8.2.1	 	When a court sanctions a compromise or arrangement in connection with the
acquisition of Shares, an Award Vests, subject to rule 8.2.3, but, in the case of an
Award which is subject to a performance-based Vesting Condition, only to the extent
that the Vesting Condition has been satisfied as determined by the Directors under rule
8.2.2. The Award lapses as to the balance unless exchanged under rule 8.2.3. This rule
applies to a court sanction under Section 425 of the Companies Act 1985 or equivalent
procedure under local legislation.
	 
	 	8.2.2	 	Where an Award which is subject to a performance-based Vesting Condition Vests
under rule 8.2.1, the Directors will determine the extent to which the Vesting
Condition has been satisfied and the proportion of the Award which will Vest. In
addition, the Directors may decide that all Awards should be reduced pro rata to
reflect the acceleration of Vesting.
	 
	 	8.2.3	 	An Award will not Vest under rule 8.2.1 but will be exchanged under rule 9
(Exchange of Awards) to the extent that:

	 	(i)	 	an offer to exchange the Award is made to and accepted by a
Participant; or
	 
	 	(ii)	 	the Directors, with the consent of the Acquiring Company,
decide before court sanction that the Award will be automatically exchanged.

	8.3	 	Demergers or other corporate events

	 	8.3.1	 	If the Directors become aware that the Company is or is expected to be
affected by any demerger, distribution (other than an ordinary dividend) or other
transaction not falling within rules 8.1 (Takeovers), or 8.2(Schemes of arrangement)
which, in the opinion of the Directors would affect the current or future value of any
Award, the Directors may allow an Award to Vest but, in the case of an Award which is
subject to a performance-based Vesting Condition, only to the extent that the Vesting
Condition has been satisfied as determined by the Directors under rule 8.3.2 and
subject to any other conditions the Directors may decide to impose. The Award lapses as
to the balance.
	 
	 	8.3.2	 	Where an Award which is subject to a performance-based Vesting Condition Vests
under rule 8.3.1, the Directors will determine the extent to which the Vesting
Condition has been satisfied and the proportion of the Award which will Vest. In
addition, the Directors may decide that all Awards should be reduced pro rata to
reflect the acceleration of Vesting.
	 
	 	8.3.3	 	The Company will notify any Participant who is affected by the Directors
exercising their discretion under this rule.

	8.4	 	Directors
	 
	 	 	In this rule, “Directors” means those people who were members of the remuneration committee
of the Company immediately before the change of Control.
	 
	8.5	 	Overseas transfer
	 
	 	 	If a Participant is transferred to work in another country and, as a result of that transfer
he would:

 

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	 	8.5.1	 	suffer a tax disadvantage in relation to his Awards (this being shown to the
satisfaction of the Directors); or
	 
	 	8.5.2	 	become subject to restrictions on his ability to exercise his Awards or to
hold or deal in the Shares or the proceeds of the sale of the Shares acquired on
exercise because of the security laws or exchange control laws of the country to which
he is transferred

	 	 	then if the Participant continues to hold an office or employment with a Member of the
Group, the Directors may decide that the Awards will Vest on a date they choose before or
after the transfer takes effect. The Award will Vest to the extent they permit and will
lapse as to the balance.
	 
	9	 	Exchange of Awards
	 
	9.1	 	Timing of exchange
	 
	 	 	Where an Award is to be exchanged under rule 8 (Takeovers and restructurings) the exchange
will take place as soon as practicable after the relevant event.
	 
	9.2	 	Exchange terms
	 
	 	 	Where a Participant is granted a new award in exchange for an existing Award, the new Award:

	 	9.2.1	 	must confer a right to acquire shares in the Acquiring Company or another body
corporate determined by the Acquiring Company;
	 
	 	9.2.2	 	must be equivalent to the existing Award, subject to rule 9.2.4;
	 
	 	9.2.3	 	is treated as having been acquired at the same time as the existing Award and,
subject to rule 9.2.4, Vests in the same manner and at the same time;
	 
	 	9.2.4	 	must either:

	 	(i)	 	be subject to a Vesting Condition which is, so far as possible,
equivalent to any Vesting Condition applying to the existing Award; or
	 
	 	(ii)	 	not be subject to any Vesting Condition but be in respect of
the number of shares which is equivalent to the number of Shares comprised in
the existing Award which would have Vested under rule 8.1 or 8.2, and Vest at
the end of the Vesting Period;

	 	9.2.5	 	is governed by the Plan as if references to Shares were references to the
shares over which the new award is granted and references to the Company were
references to the Acquiring Company or the body corporate determined under rule 9.2.1.

	10	 	General
	 
	10.1	 	Terms of employment

	 	10.1.1	 	For the purposes of this rule, “Employee” means any employee of a Member of the
Group.

 

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	 	10.1.2	 	This rule applies during an Employee’s employment and after the termination of an
Employee’s employment, whether or not the termination is lawful.
	 
	 	10.1.3	 	Nothing in the rules or the operation of the Plan forms part of the contract of
employment of an Employee. The rights and obligations arising from the employment
relationship between the Employee and the Company 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.
	 
	 	10.1.4	 	No employee has a right to participate in the Plan. Participation in the Plan or the
grant of Awards on a particular basis in any year does not create any right to or
expectation of participation in the Plan or the grant of Awards on the same basis, or
at all, in any future year.
	 
	 	10.1.5	 	The terms of the Plan do not entitle the Employee to the exercise of any discretion
in his favour.
	 
	 	10.1.6	 	The Employee will have no claim or right of action in respect of any decision,
omission or discretion, which may operate to the disadvantage of the Employee even if
it is unreasonable, irrational or might otherwise be regarded as being in breach of the
duty of trust and confidence (and/or any other implied duty) between the Employee and
his employer.
	 
	 	10.1.7	 	No Employee has any right to compensation for any loss in relation to the Plan,
including any loss in relation to:

	 	(i)	 	any loss or reduction of rights or expectations under the Plan
in any circumstances (including lawful or unlawful termination of employment);
	 
	 	(ii)	 	any exercise of a discretion or a decision taken in relation to
an Award or to the Plan, or any failure to exercise a discretion or take a
decision;
	 
	 	(iii)	 	the operation, suspension, termination or amendment of the
Plan.

	 	10.1.8	 	Participation in the Plan is permitted only on the basis that the Participant accepts
all the provisions of the rules, including this rule. By participating in the Plan, an
Employee waives all rights under the Plan, other than the right to acquire shares
subject to and in accordance with the express terms of the Plan and the Vesting
Condition, in consideration for, and as a condition of, the grant of an Award under the
Plan.
	 
	 	10.1.9	 	Nothing in this Plan confers any benefit, right or expectation on a person who is not
an Employee. No such third party has any rights under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this Plan. This does not affect any other
right or remedy of a third party which may exist.

	10.2	 	Directors’ decisions final and binding
	 
	 	 	The decision of the Directors on the interpretation of the Plan or in any dispute relating
to an Award or matter relating to the Plan will be final and conclusive.
	 
	10.3	 	Documents sent to shareholders
	 
	 	 	The Company may send to Participants copies of any documents or notices normally sent to the
holders of its Shares at or around the same time as issuing them to the holders of its
Shares or may direct participants to a relevant website.

 

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	10.4	 	Costs
	 
	 	 	The Company will pay the costs of introducing and administering the Plan. The Company may
ask a Participant’s employer to bear the costs in respect of an Award to that Participant.
	 
	10.5	 	Regulations
	 
	 	 	The Directors have the power from time to time to make or vary regulations for the
administration and operation of the Plan but these must be consistent with its rules.
	 
	10.6	 	Employee trust
	 
	 	 	The Company and any Subsidiary may provide money to the trustee of any trust or any other
person to enable them or him to acquire Shares to be held for the purposes of the Plan, or
enter into any guarantee or indemnity for those purposes, to the extent permitted by Section
153 of the Companies Act 1985.
	 
	10.7	 	Data protection
	 
	 	 	By participating in the Plan the Participant consents to the holding and processing of
personal data provided by the Participant to any Member of the Group, trustee or third party
service provider, for all purposes relating to the operation of the Plan. These include, but
are not limited to:

	 	10.7.1	 	administering and maintaining Participant records;
	 
	 	10.7.2	 	providing information to Members of the Group, Rio Tinto Limited and its
subsidiaries, trustees of any employee benefit trust, registrars, brokers or third
party administrators of the Plan;
	 
	 	10.7.3	 	providing information to future purchasers of the Company or the business in which
the Participant works;
	 
	 	10.7.4	 	transferring information about the Participant to a country or territory outside the
European Economic Area that may not provide the same statutory protection for the
information as the Participant’s home country.

	10.8	 	Consents
	 
	 	 	All transfers of Shares will be subject to any necessary consents under any relevant
enactments or regulations for the time being in force in the United Kingdom or elsewhere.
The Participant will be responsible for complying with any requirements he needs to fulfil
in order to obtain or avoid the necessity for any such consent.

	 
	10.9	 	Articles of association
	 
	 	 	Any Shares acquired under the Plan are subject to the articles of association of the Company
from time to time in force.

	 
	10.10	 	Notices

	 	10.10.1	 	Any notice or other document which has to be given to a person who is or will be
eligible to be a Participant under or in connection with the Plan may be:

	 	(i)	 	delivered or sent by post to him at his home address according
to the records of his employing company; or

 

10

 

	 	(ii)	 	sent by e-mail or fax to any e-mail address or fax number which
according to the records of his employing company is used by him;
	 
	 	or in either case such other address which the Company considers appropriate.

	 	10.10.2	 	Any notice or other document which has to be given to the Company or other duly
appointed agent under or in connection with the Plan may be delivered or sent by post
to it at its registered office (or such other place as the Directors or duly appointed
agent may from time to time decide and notify to Participants) or sent by e-mail or
fax to any e-mail address or fax number notified to the Participant.

	 
	 	 	 	Notices sent by post will be deemed to have been given on the second day after the date of
posting. However, notices sent by or to a Participant who is working overseas will be deemed
to have been given on the seventh day after the date of posting. Notices sent by e-mail or
fax, in the absence of evidence to the contrary, will be deemed to have been received on the
day after sending.

	11	 	Changing the Plan and termination
	 
	11.1	 	Directors’ powers
	 
	 	 	The Directors may at any time change the Plan in any way, except that Rule 1.1 (no issue of
new Shares) may not be changed to include the issue of new Shares or treasury shares and
Rule 1.2 (Eligibility) may not be changed to include directors as eligible participants
without the prior approval of the Company in general meeting.
	 
	11.2	 	Notice
	 
	 	 	The Directors may give written notice of any changes made to any Participant affected.
	 
	12	 	Governing law and jurisdiction
	 
	 	 	English law governs the Plan and all Awards and their construction. The English Courts have
non-exclusive jurisdiction in respect of disputes arising under or in connection with the
Plan or any Award.
	 
	13	 	Definitions
	 
	 	 	In these rules:
	 
	 	 	“Acquiring Company” means a person who obtains Control of the Company;
	 
	 	 	“Additional Shares” means the number of Shares included in an Award as determined under Rule
1.6.2;
	 
	 	 	“Award” means a Conditional Award and/or a Matching Award as appropriate;
	 
	 	 	“Base Number of Shares” has the meaning given in Rule 1.6;
	 
	 	 	“Company” means Rio Tinto plc;
	 
	 	 	“Conditional Award” means a conditional right to acquire Shares granted under the Plan;
	 
	 	 	“Control” has the meaning given to it by Section 840 of the Income and Corporation Taxes Act
1988;

 

11

 

	 	 	“Dealing Restrictions” means restrictions imposed by statute, order, regulation or
Government directive, or by the Model Code or any code adopted by the Company based on the
Model Code;
	 
	 	 	“Directors” means, subject to rule 8.4 (Directors), the board of directors of the Company or
a duly authorised committee. The Directors may delegate authority to carry out specific
tasks under these Rules to any one director or the secretary;
	 
	 	 	“Dividends”, in relation to a particular Award, means dividends on Shares (excluding any
non-ordinary dividend which the Directors determine should be excluded) the record date for
which was within the period between the grant of the Award and the day before the date on
which those Shares are registered in the name of the relevant Participant (both inclusive);

     “Expiry Date” means the tenth anniversary of the approval of the Plan by the Directors

     “Group” means:

	 	(i)	 	the Company; and
	 
	 	(ii)	 	its Subsidiaries from time to time; and
	 
	 	(iii)	 	any other company which is associated with the Company and is so designated by
the Directors;

	 	 	and “Member of the Group” shall be construed accordingly;
	 
	 	 	“Matching Award” means a right to acquire Shares granted under the Plan and linked to a
Conditional Award;
	 
	 	 	“Model Code” means the Model Code on dealings in securities set out in Listing Rule 9 annex
1, or such Code as may replace it during the life of the Plan;
	 
	 	 	“Participant” means a person holding an Award or his personal representatives;
	 
	 	 	“Plan” means these rules known as “The Rio Tinto Management Share Plan 2007” as changed
from time to time;
	 
	 	 	“Retention Period” means the period of time during which Vested Shares are to be held for
the purposes of a Matching Award;
	 
	 	 	“Shares” means fully paid ordinary shares in the capital of the Company;
	 
	 	 	“Subsidiary” means a company which is a subsidiary of the Company within the meaning of
Section 736 of the Companies Act 1985;
	 
	 	 	“Vesting” in relation to a Conditional Award or a Matching Award, means a Participant
becoming entitled to have the Shares transferred to him subject to these rules and “Vested
Shares” shall be construed accordingly;
	 
	 	 	“Vesting Condition” means any vesting condition imposed under rule 1.4 (Vesting Conditions);
	 
	 	 	“Vesting Period” means the period in respect of which a Vesting Condition is to be
satisfied.

 

12EX-4.6

 

Exhibit 4.6

Rules of the Rio Tinto Limited

Share Option 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 2004

 

 

			
	Rules of the Rio Tinfo Limited Share Option 

Plan 2004
	 	
	 	 	 
	 

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 
	1.	 	Meanings of Words Used	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	Grant of Options	 	 	2	 
	 

	 	 	2.1	 	 	Grant of Options
	 	 	2	 
	 

	 	 	2.2	 	 	Time when Options may be granted
	 	 	2	 
	 

	 	 	2.3	 	 	Performance Conditions
	 	 	2	 
	 

	 	 	2.4	 	 	Option Certificates
	 	 	3	 
	 

	 	 	2.5	 	 	No Payment
	 	 	3	 
	 

	 	 	2.6	 	 	Disclaimer of Option
	 	 	3	 
	 

	 	 	2.7	 	 	Disposal restrictions
	 	 	3	 
	 

	 	 	2.8	 	 	Administrative errors
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	3.	 	Option Price	 	 	3	 
	 

	 	 	3.1	 	 	Setting the Price
	 	 	3	 
	 

	 	 	3.2	 	 	Market value
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.	 	Plan Limits	 	 	3	 
	 

	 	 	4.1	 	 	10 per cent 10 year limit
	 	 	3	 
	 

	 	 	4.2	 	 	5 per cent 10 year limit
	 	 	4	 
	 

	 	 	4.3	 	 	ASIC prospectus relief limit
	 	 	4	 
	 

	 	 	4.4	 	 	Exclusions
	 	 	4	 
	 

	 	 	4.5	 	 	Meaning of Allocate
	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	5.	 	Variations in Share Capital	 	 	4	 
	 

	 	 	5.1	 	 	Adjustment of Options
	 	 	4	 
	 

	 	 	5.2	 	 	Notice
	 	 	4	 
	 

	 	 	5.3	 	 	Participation in new issues
	 	 	4	 
	 

	 	 	5.4	 	 	No other changes to Option terms
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.	 	Exercise and Lapse — General Rules	 	 	5	 
	 

	 	 	6.1	 	 	Exercise
	 	 	5	 
	 

	 	 	6.2	 	 	Lapse
	 	 	5	 
	 

	 	 	6.3	 	 	Employment by another Member of the Group
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	7.	 	Exercise and Lapse — Exceptions to the General Rules	 	 	5	 
	 

	 	 	7.1	 	 	Cessation of Employment
	 	 	5	 
	 

	 	 	7.2	 	 	Death
	 	 	6	 
	 

	 	 	7.3	 	 	Restrictions on exercise
	 	 	6	 
	 

	 	 	7.4	 	 	Takeovers
	 	 	6	 
	 

	 	 	7.5	 	 	Company Reconstructions
	 	 	7	 
	 

	 	 	7.6	 	 	Demergers and other significant distributions
	 	 	7	 
	 

	 	 	7.7	 	 	Winding-Up
	 	 	8	 
	 

	 	 	7.8	 	 	Priority
	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	8.	 	Exchange of Options	 	 	8	 
	 

	 	 	8.1	 	 	Application
	 	 	8	 
	 

	 	 	8.2	 	 	Exchange
	 	 	8	 
	 

	 	 	8.3	 	 	Period for Substitution
	 	 	9	 

 
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	 	 	8.4	 	 	Consequences of Exchange
	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	9.	 	Exercise of Options	 	 	9	 
	 

	 	 	9.1	 	 	Exercise
	 	 	9	 
	 

	 	 	9.2	 	 	Manner of Exercise
	 	 	9	 
	 

	 	 	9.3	 	 	Option Exercise Date
	 	 	10	 
	 

	 	 	9.4	 	 	Part Exercise
	 	 	10	 
	 

	 	 	9.5	 	 	Cash alternative
	 	 	10	 
	 

	 	 	9.6	 	 	Issue or Transfer
	 	 	10	 
	 

	 	 	9.7	 	 	Rights
	 	 	10	 
	 

	 	 	9.8	 	 	Consents
	 	 	11	 
	 

	 	 	9.9	 	 	Constitution
	 	 	11	 
	 

	 	 	9.10	 	 	Listing
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	10.	 	General	 	 	11	 
	 

	 	 	10.1	 	 	Notices
	 	 	11	 
	 

	 	 	10.2	 	 	Documents sent to Shareholders
	 	 	11	 
	 

	 	 	10.3	 	 	Committee decisions final and binding
	 	 	11	 
	 

	 	 	10.4	 	 	Costs
	 	 	11	 
	 

	 	 	10.5	 	 	Regulations
	 	 	12	 
	 

	 	 	10.6	 	 	Terms of Employment
	 	 	12	 
	 

	 	 	10.7	 	 	Replacement Option certificates
	 	 	13	 
	 

	 	 	10.8	 	 	Withholding
	 	 	13	 
	 

	 	 	10.9	 	 	Privacy consents
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	11.	 	Changing the Plan and Termination	 	 	14	 
	 

	 	 	11.1	 	 	Variations and amendments
	 	 	14	 
	 

	 	 	11.2	 	 	Notice
	 	 	14	 
	 

	 	 	11.3	 	 	Termination of the Plan
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	12.	 	Governing Law	 	 	14	 

 
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	Rules of the Rio Tinfo Limited Share Option 

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RULES OF THE RIO TINTO LIMITED

SHARE OPTION PLAN 1998

	1.	 	Meanings of Words Used

 

	 	 	In these Rules:
	 
	 	 	Acquiring Company has the meaning given in Rule 8.
	 
	 	 	ASIC means Australian Securities and Investments Commission.
	 
	 	 	ASX Listing Rules means the Listing Rules of the Australian Stock Exchange in force from
time to time.
	 
	 	 	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).
	 
	 	 	Date of Grant means the date on which the Committee resolves to grant an Option.
	 
	 	 	Eligible Employee means any executive director, employee or class of employees of a
Participating Company who is approved by the Committee.
	 
	 	 	Member of the Group means:

	 	(a)	 	the Company; and
	 
	 	(b)	 	its Subsidiaries from time to time.

Option means a right to acquire Shares granted under the Plan.

Optionholder means a person holding an Option or his personal representatives.

Option Period means a period starting on the Date of Grant of an Option and ending at the
end of the day before the 10th anniversary of the Date of Grant or such shorter
period as may be specified on the Date of Grant.

Option Price means the amount payable for each Share on the exercise of an Option calculated
as described in Rule 3, and subject to any variation under Rule 5.

Participating Companies means:

	 	(a)	 	the Company; and
	 
	 	(b)	 	any Subsidiary of the Company.

Performance Condition means any condition or conditions imposed under Rule 2.3.

Plan means this plan known as ‘The Rio Tinto Limited Share Option Plan 2004’.

Rules means these rules as changed from time to time.

Shares means fully paid ordinary shares in the capital of the Company.

 

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	Rules of the Rio Tinfo Limited Share Option 

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	 	 	Subsidiary means a company which is a subsidiary of the Company within the meaning given by
the Corporations Act.
	 
	2.	 	Grant of Options

 

	2.1	 	Grant of Options
	 
	 	 	The Committee may grant to any Eligible Employee an Option to acquire such number of Shares
as they may determine, provided that the value of the number of Shares over which Options
granted in respect of any financial year of the Company shall not exceed 300% of the
Eligible Employee’s basic rate of pay at 1 March of the calendar year in which the Option is
granted. 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
Option Period, or in such other way as the Committee may determine.
	 
	2.2	 	Time when Options may be granted

	 	2.2.1	 	Options may only be granted within 42 days starting on any of the following:

	 	(i)	 	the day after the announcement of the Company’s results to the Australian
Stock Exchange for any period. The Committee may not grant Options at any
time which would cause the Option Price to be calculated by reference to any
days on or before that announcement;
	 
	 	(ii)	 	the adoption of the Plan;
	 
	 	(iii)	 	any day on which the Committee resolves that
exceptional circumstances exist which justify the grant of Options; or
	 
	 	(iv)	 	any day on which changes to the legislation or
regulations affecting share option schemes are announced, effected or made.

	 	2.2.2	 	The Committee may only grant Options between the adoption of the Plan
and the 10th anniversary of that date.
	 
	 	2.2.3	 	If the Committee cannot grant any Options due to restrictions imposed
by statute, order, ASX Listing Rules, regulation or government directive, the
Committee may grant Options within 42 days after the lifting of such
restrictions.

	2.3	 	Performance Conditions
	 
	 	 	When granting an Option, the Committee must make its exercise conditional on the
satisfaction of a Performance Condition. The Performance Condition must be objective, and
specified at the Date of Grant. The Committee may waive or change the Performance Condition
if anything happens which causes the Committee to consider that:

	 	2.3.1	 	a changed Performance Condition would be a fairer measure of
performance, and would be no more difficult to satisfy; or
	 
	 	2.3.2	 	the Performance Condition should be waived.

 

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	Rules of the Rio Tinfo Limited Share Option 

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	2.4	 	Option Certificates
	 
	 	 	Each Optionholder will receive an option certificate, which may be executed as a
deed, on or as soon as practicable after the Date of Grant.
	 
	2.5	 	No Payment
	 
	 	 	Optionholders are not required to pay for the grant of any Option.
	 
	2.6	 	Disclaimer of Option
	 
	 	 	Any Optionholder may disclaim all or part of his Option by notice in writing to the
Secretary of the Company, within 30 days after the Date of Grant. If this happens the
Option will be deemed never to have been granted under the Plan. No consideration is
payable for the disclaimer.
	 
	2.7	 	Disposal restrictions
	 
	 	 	Except for the transmission of an Option on the death of an Optionholder to his
personal representatives, neither an Option nor any rights in respect of it may be
transferred, assigned or otherwise disposed of by an Optionholder to any other person.
	 
	2.8	 	Administrative errors
	 
	 	 	If and to the extent that the Committee tries to grant Options which are inconsistent
with Rule 4 (scheme limits), the Options will be limited and will take effect from the
Date of Grant on a basis consistent with Rule 4.
	 
	3.	 	Option Price

 

	3.1	 	Setting the Price
	 
	 	 	The Committee will set the Option Price on the Date of Grant. The Option Price will be
not less than the market value of a Share on the Date of Grant.
	 
	3.2	 	Market value
	 
	 	 	‘Market value’ for the purpose of this Rule on any particular day means the average of
the market price of shares (as derived from the Official List of the Australian Stock
Exchange) on any period of five Business Days of which the last falls no earlier than
five days before the Date of Grant.
	 
	4.	 	Plan Limits

 

	4.1	 	10 percent 10 year limit
	 
	 	 	The number of Shares which may be allocated under the Plan on any day will not exceed
10 per cent 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 operated by the
Company.

 

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	Rules of the Rio Tinto Limited Share Option 

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	4.2	 	5 percent 10 year limit
	 
	 	 	The number of Shares which may be allocated under the Plan on any day will not exceed 5 per
cent 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.
	 
	4.3	 	ASIC prospectus relief limit
	 
	 	 	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.
	 
	4.4	 	Exclusions
	 
	 	 	Where the right to acquire Shares is released or lapses without being exercised,
the Shares concerned will be ignored when calculating the limits in this Rule.
	 
	4.5	 	Meaning of Allocate
	 
	 	 	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.
	 
	5.	 	Variations in Share Capital

 

	5.1	 	Adjustment of Options
	 
	 	 	If there is a variation in the equity share capital of the Company, including a
capitalisation or rights issue, sub-division, consolidation or reduction of share capital, a
demerger (in whatever form) or if the Company makes a special distribution including a
distribution in specie, subject to the ASX Listing Rules in force from time to time:

	 	5.1.1	 	the number or nominal amount of Shares comprised in each Option; and
	 
	 	5.1.2	 	the Option Price,

may be adjusted in any way (including retrospective adjustments) in which the Committee
considers appropriate.

	5.2	 	Notice
	 
	 	 	The Committee may notify Optionholders of any adjustment made under this Rule 5.
	 
	5.3	 	Participation in new issues
	 
	 	 	An Optionholder may not participate in new issues of shares without first exercising his Option.

 

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	Rules of the Rio Tinto Limited Share Option 

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	5.4	 	No other changes to Option terms
	 
	 	 	Other than as expressly specified in these Rules, no Optionholder will have any right to a change in:

	 	5.4.1	 	the Option Price of an Option; or
	 
	 	5.4.2	 	the number or nominal amount of Shares comprised in each Option.

	6.	 	Exercise and Lapse — General Rules

 

	6.1	 	Exercise
	 
	 	 	Except where exercise is allowed as described in Rule 7, an Option can only be exercised:

	 	6.1.1	 	on or after the third anniversary of its Date of Grant, or such other date as
may be specified on the Date of Grant;
	 
	 	6.1.2	 	if any Performance Condition is satisfied or waived; and
	 
	 	6.1.3	 	so long as the Optionholder is a director or employee of a Member of the Group.

	6.2	 	Lapse
	 
	 	 	An Option will lapse on the earliest of:

	 	6.2.1	 	the date the Optionholder ceases to be a director or employee of a Member of
the Group, unless any of the provisions in Rule 7 apply;
	 
	 	6.2.2	 	any date specified in any Performance Condition; or
	 
	 	6.2.3	 	the expiry of the Option Period, unless Rule 7.2 applies (death).

	6.3	 	Employment by another Member of the Group
	 
	 	 	For the purposes of Rule 6.2.1, an Optionholder will not be treated as ceasing to be a
director or employee of a Member of the Group if he is employed by another Member of the
Group.
	 
	7.	 	Exercise and Lapse — Exceptions to the General Rules

 

	7.1	 	Cessation of Employment
	 
	 	 	If an Optionholder ceases to be a director or an employee of any Member of the Group for any
of the reasons set out below, his Options will lapse at the latest of the end of the period
of one year after the date of cessation or one year after the date of latest possible
vesting under the Performance Condition (or such longer period as the Committee may
determine) but may be exercised during that period, subject to satisfaction of any
Performance Condition and subject to Rule 7.3. The reasons are:

	 	7.1.1	 	ill-health, injury or disability (as determined by the Optionholder’s employer);
	 
	 	7.1.2	 	redundancy;
	 
	 	7.1.3	 	transfer to Rio Tinto pic or one of its subsidiaries;

 

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	Rules of the Rio Tinto Limited Share Option 

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	 	7.1.4	 	retirement (by agreement with the Optionholder’s employer);
	 
	 	7.1.5	 	his employing company ceasing to be under the control of the Company;
	 
	 	7.1.6	 	a transfer of the undertaking in which the Optionholder works to a person who
is neither under the control of the Company nor a Member of the Group; or
	 
	 	7.1.7	 	any other reason specified by the Committee in its absolute discretion, but
subject to any shorter exercise period determined by the Committee.

	7.2	 	Death
	 
	 	 	If an Optionholder dies, his Options may be exercised by his personal representatives within
one year of his death, irrespective of the satisfaction of any Performance Condition, but
subject to Rule 7.3. To the extent that any Option exercisable under this sub-rule is not so
exercised, it will lapse at the end of the one year period.
	 
	7.3	 	Restrictions on exercise

	 	7.3.1	 	Except in the case of a transfer as contemplated by Rule 7.1.3, any Options
which have not been held for 12 months on the date an Optionholder dies or ceases to be
a director or an employee of any Member of the Group may only be exercised pursuant to
Rule 7.1 or 7.2 pro rata.
	 
	 	7.3.2	 	Upon an Optionholder ceasing to be, or if the Committee is satisfied that an
Optionholder is to cease being, a director or an employee of any Member of the Group
for any of the reasons specified in Rules 7.1.1 to 7.1.7, the Optionholder may, by
notice in writing to the Committee, elect that some or all of his Options lapse. Any
Options the subject of such a notice will lapse with effect from the date of the
notice. An Optionholder may ask the Committee to confirm to the Optionholder whether
the Committee is satisfied as to the relevant matters.

	7.4	 	Takeovers
	 
	 	 	If a person (or a group of persons acting in concert) obtains control of the Company as a
result of making an offer to acquire shares which is either unconditional or is made on a
condition such that if it is satisfied the person making the offer will have control of the
Company, Options may be exercised, subject to the satisfaction of any Performance Condition
measured at the date control is obtained (and, for the purposes only of this Rule, as if any
relevant period for measurement the subject of the Performance Condition is deemed to have
ended on such date), within the 6 month period after the person making the offer has
obtained control of the Company and any condition subject to which the offer is made has
been satisfied.
	 
	 	 	The Options will lapse at the end of the 6 month period, unless the Committee
gives reasonable notice to the Optionholders before the end of the 6 month period
that the Options will not lapse.

 

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	Rules of the Rio Tinto Limited Share Option 

Plan 2004
	 	
	 	 	 
	 

	 	 	If someone becomes bound or entitled to compulsorily acquire Shares, Options may be
exercised, subject to the satisfaction of any Performance Condition measured as at the date
control is obtained (and, for the purposes only of this Rule, as if any relevant period for
measurement the subject of the Performance Condition is deemed to have ended on such date),
at any time when that person remains so bound or entitled. Options not exercised within that
period will lapse at the end of the relevant period referred to in Rule 8.3. If more than one
period is relevant the Options will lapse at the end of the later period, unless the
Committee gives notice to the Optionholders before the expiry of the relevant period that the
Options will not lapse.
	 
	 	 	However, the Committee may determine that Options will not become exercisable under this
rule, but that instead all Options will be automatically replaced by equivalent new options
in accordance with Rule 8.
	 
	7.5	 	Company Reconstructions
	 
	 	 	If under Section 411 of the Corporations Act a court sanctions a compromise or arrangement
involving the Shares, the reconstruction of the Company or its amalgamation with any other
company or companies, the following will apply:

	 	7.5.1	 	Optionholders may exercise their Options, subject to the satisfaction of any
Performance Condition measured at the date of the court’s sanction (and, for the
purposes only of this Rule, as if any relevant period for measurement the subject of the
Performance Condition is deemed to have ended on such date), at any time within the 6
month period after the date of the court’s sanction. Any Option not exercised by the end
of that period will become unexerciseable and will lapse at the end of that period.
	 
	 	7.5.2	 	However, the Committee may determine that Options will not become exercisable
under Rule 7.5.1, but that instead all Options will be automatically replaced by
equivalent new options in accordance with Rule 8.

	7.6	 	Demergers and other significant distributions
	 
	 	 	If the Committee becomes aware that the Company is or is expected to be affected by any
demerger, dividend in specie, super dividend or other transaction which, in the opinion of
the Committee, would affect the current or future value of any Option, the Committee, may, in
its discretion, allow some or all Options to be exercised. The Committee will specify the
period of exercise of such Options, whether the Options will lapse at the end of the period,
and whether exercise is subject to satisfaction of any Performance Condition. In exercising
their discretion, the Committee may take into account considerations relating to the
Company and other Members of the Group, and other employees and Optionholders. The Committee
will notify any Optionholder who is affected by this Rule.

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	Rules of the Rio Tinto Limited Share Option

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	7.7	 	Winding-Up
	 
	 	 	If notice is duly given to Members of a resolution for the voluntary winding-up of the
Company, Options may be exercised, irrespective of the satisfaction of any Performance
Condition, until the start of the winding-up within the meaning of the Corporations Act (but
the exercise of any Option in these circumstances will be of no effect if the resolution is
not passed). All Options will lapse on a winding-up of the Company unless exercised before
the winding-up starts.
	 
	 	 	If the Company is wound-up by the court, Options may be exercised, irrespective of the
satisfaction of any Performance Condition, within 2 months after the date of the winding-up
order. However, the liquidator or the court (if appropriate) must authorise the issue of
Shares after such exercise, and the Optionholder must apply for this authority and pay his
application costs. Any Options not exercised during the 2 month period will lapse at the end
of the period.
	 
	7.8	 	Priority
	 
	 	 	If there is any conflict between any of the provisions of Rules 6 and 7, the provision which
results in the shortest exercise period or the earliest lapse of the Option, or both, will
prevail.
	 
	8.	 	Exchange of Options

 

	8.1	 	Application
	 
	 	 	This Rule applies if a company (the Acquiring Company):

	 	8.1.1	 	obtains control of the Company as a result of making a general offer to acquire:

	 	(i)	 	the whole of the issued ordinary share capital of the Company (other than
that which is already owned by it and its subsidiary or holding company) made on
a condition such that, if satisfied, the Acquiring Company will have control of
the Company; or
	 
	 	(ii)	 	all the Shares (or those Shares not already owned by
the Acquiring Company or its subsidiary or holding company); or

	 	8.1.2	 	obtains control of the Company under a compromise or arrangement sanctioned by
the court under Section 411 of the Corporations Act; or
	 
	 	8.1.3	 	becomes bound or entitled to compulsorily acquire Shares under the Corporations
Act.

	8.2	 	Exchange
	 
	 	 	If any of the events described in Rule 8.1 happens, an Optionholder may, during the period
referred to in Rule 8.3, agree with the Acquiring Company to release his Option in
consideration of the grant to him of a new option. The new option must be
equivalent to the released option.

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	8.3	 	Period for Substitution
	 
	 	 	The period referred to in Rule 8.2 is:

	 	8.3.1	 	in a case falling within Rule 8.1.1, 6 months starting with the time when the
Acquiring Company obtains control of the Company and any condition subject to which the
offer is made is satisfied;
	 
	 	8.3.2	 	in a case falling within Rule 8.1.2, 6 months starting with the time when the
court sanctions the compromise or arrangement; and
	 
	 	8.3.3	 	in a case falling within Rule 8.1.3, the period during which the Acquiring
Company remains so bound or entitled.

	8.4	 	Consequences of Exchange
	 
	 	 	Where an Optionholder is granted a new option for release of his old Option as described in
this Rule 8, then:

	 	8.4.1	 	the new option will be treated as having been acquired at the same time as the
old Option and be exercisable in the same manner and at the same time as the old Option;
	 
	 	8.4.2	 	the new option will be subject to the provisions of the Plan as it had
effect in relation to the old Option immediately before the release but Rule 11.2
will not apply;
	 
	 	8.4.3	 	the Conditions will not apply, unless the terms of the Conditions say otherwise; and
	 
	 	8.4.4	 	with effect from the release and grant, these Rules will be construed in
relation to the new option as if references to the Company and Shares were references to
the Acquiring Company and shares over which the new option is granted.

	9.	 	Exercise of Options

 

	9.1	 	Exercise
	 
	 	 	An Optionholder can exercise his Option validly only in the way described in this Rule.
	 
	9.2	 	Manner of Exercise
	 
	 	 	Options must be exercised by notice in writing delivered to the Secretary of the Company or
other duly appointed agent. The notice of exercise of the Option must be completed, signed by
the Optionholder or by his appointed agent, and must be accompanied by:

	 	9.2.1	 	the relevant option certificate; and
	 
	 	9.2.2	 	correct payment in full of the Option Price for the number of Shares being
acquired, or details of arrangements agreed between the Optionholder and the Company
made for the payment of the Option Price for the number of Shares being acquired.

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	9.3	 	Option Exercise Date

	 	9.3.1	 	Subject to Rule 9.3.2 the Option Exercise Date will be the later of:

	 	(i)	 	the date of receipt by the Secretary of the Company of the documents and
payment referred to in Rule 9.2; and
	 
	 	(ii)	 	the date on which the Committee either decides that each of
the conditions to which the Option is subject has been satisfied, or waives such
conditions.
	 
	 	 	 	This paragraph (ii) will only apply if the Option is subject to any conditions.
The Committee must make a decision about the satisfaction or waiver of the
conditions within 14 days of receiving the documents and payment.

	 	9.3.2	 	If any statute, regulation, ASX Listing Rule or code adopted by the Company,
prohibits the exercise of Options, or the Company Secretary reasonably believes it
so prohibits, the date of exercise will be either the date described in Rule 9.3, or, if
later, the date when the Optionholder is permitted or the Company Secretary
believes the Optionholder is permitted to exercise an Option. However, this Rule
does not extend any period in which an Option is exercisable.

	9.4	 	Part Exercise
	 
	 	 	An Option may be exercised in part or in whole (but may not be exercised in a manner which
would require the issue of a fraction of a Share).
	 
	9.5	 	Cash alternative
	 
	 	 	The Committee may in its discretion determine not to procure the issue or transfer of Shares
to an Optionholder who exercises his Option, but instead to pay to him a cash amount equal to
the amount by which the market value of the Shares in respect of which the Option is
exercised exceeds the Option Price, or to procure the transfer to him of Shares to the value
of that cash amount. If the Committee so determines, the Option Price shall not be payable,
and if already paid, shall be repaid to the Optionholder forthwith.
	 
	9.6	 	Issue or Transfer
	 
	 	 	Subject to Rule 9.8:

	 	9.6.1	 	Shares to be issued following the exercise of an Option will be issued within
30 days after the Option Exercise Date or such earlier date as is required by the ASX Listing Rules.
	 
	 	9.6.2	 	Where Shares are to be transferred to an Optionholder following the exercise of an
Option rather than issued, the Committee will procure the transfer of Shares within
30 days after the Option Exercise Date.

	9.7	 	Rights

	 	9.7.1	 	Shares issued on the exercise of an Option will rank equally in all respects
with the Shares on issue on the date of allotment. They will not rank for any rights
attaching to Shares by reference to a record date preceding the date of allotment.

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	 	9.7.2	 	Where Shares are to be transferred on the exercise of an Option, Optionholders
will be entitled to all rights attaching to the Shares by reference to a record date on
or after the transfer date. They will not be entitled to rights before that date.

	9.8	 	Consents
	 
	 	 	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 Optionholder will be responsible for complying with any requirements to be
fulfilled in order to obtain or avoid the necessity for any such consent.
	 
	9.9	 	Constitution
	 
	 	 	Any Shares acquired on the exercise of Options will be subject to the Constitution of the Company from time to time in force.
	 
	9.10	 	Listing
	 
	 	 	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 under the Plan as soon as
practicable after their allotment.
	 
	10.	 	General

 

	10.1	 	Notices
	 
	 	 	Any notice or other document which has to be given under or in connection with the Plan may
be delivered to an Optionholder or sent by post to him at his home address according to the
records of his employing company or such other address which the Company considers
appropriate. Any notice or other document which has to be given to the Company under or in
connection with the Plan may be delivered or sent by post or by fax to it at its registered
office (or such other place as the Committee may from time to time decide and notify to
Optionholders). Notices sent by post will be deemed to have been given on the fifth day after
the date of posting. Notices sent by fax will be deemed to have been given 24 hours after
sending.
	 
	10.2	 	Documents sent to Shareholders
	 
	 	 	The Company may send to Optionholders copies of any documents or notices normally sent to the holders of its Shares.
	 
	10.3	 	Committee decisions final and binding
	 
	 	 	The decision of the Committee on the interpretation of the Rules or in any dispute relating
to an Option or matter relating to the Plan will be final and conclusive.
	 
	10.4	 	Costs
	 
	 	 	The Company will pay the costs of introducing and administering the Plan.

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	10.5	 	Regulations
	 
	 	 	The Committee has the power from time to time to make or vary regulations for the
administration and operation of the Plan but these must be consistent with the Rules.
	 
	10.6	 	Terms of Employment

	 	10.6.1	 	For the purposes of this Rule, “Employee” means any Optionholder, any Eligible
Employee or any other employee of a Participating Company.
	 
	 	10.6.2	 	This Rule applies:

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

	 	10.6.3	 	Nothing in the Rules 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 a Participating Company 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.
	 
	 	10.6.4	 	The grant of Options on a particular basis in any year does not create any right to or
expectation of the grant of Options on the same basis, or at all, in any future year.
	 
	 	10.6.5	 	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.
	 
	 	10.6.6	 	Without prejudice to an Employee’s right to exercise an Option subject to and in
accordance with the express terms of the Rules 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 Option. Any
and all discretions, decisions or omissions relating to the Option 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 Employee
and his employer, including any implied duty of trust and confidence. Any such implied
term is excluded and overridden by this Rule.
	 
	 	10.6.7	 	No Employee has any right to compensation for any loss in relation to the Plan,
including:

	 	(i)	 	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);

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	 	(ii)	 	any exercise of a discretion or a decision taken in relation
to an Option or to the Plan, or any failure to exercise a discretion or take a
decision;
	 
	 	(iii)	 	the operation, suspension, termination or amendment of the Plan.

	 	10.6.8	 	Participation in the Plan is permitted only on the basis that the Employee accepts all
the provisions of the Rules,
including in particular this Rule. By participating in the Plan, an Employee waives all
rights under the Plan, other than the right to exercise an Option subject to and in
accordance with the express terms of the Rules and the Performance Conditions, in
consideration for, and as a condition of, the grant of an Option under the Plan.
	 
	 	10.6.9	 	Nothing in this 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 this Plan. This does not affect any other right or remedy of a third party which
may exist.
	 
	 	10.6.10	 	Nothing in this 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 Employee.
	 
	 	10.6.11	 	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 these Rules 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.

	10.7	 	Replacement Option certificates
	 
	 	 	If any option certificate is worn out, defaced or lost, the Committee will replace it
on such conditions as it wishes to set. If an Option is exercised in part, and the
balance remains exercisable, the Committee will provide the Optionholder with a balance
certificate.
	 
	10.8	 	Withholding
	 
	 	 	The Company or any employing company may withhold any amount and make any such arrangements,
including the sale of any Shares on behalf of an Optionholder as it considers necessary to
meet any liability to taxation or social security contributions in respect of Options granted
to the Optionholder pursuant to this Plan.
	 
	10.9	 	Privacy consents
	 
	 	 	By participating in the Plan the Optionholder acknowledges that the Committee, the board of
the Company and each Member of the Group may use and disclose personal information relating
to the Optionholder for all purposes which relate to the management and administration of the
Plan including, without limitation:

	 	10.9.1	 	disclosure of personal information between Members of the Group and to Rio Tinto plc
and its subsidiaries;
	 
	 	10.9.2	 	disclosure of personal information by Members of the Group to external service
providers including banks, Plan brokers or administrators, share registries,
professional advisers and mail houses, and

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	 	10.9.3	 	disclosure of personal information to future purchasers of the Company or the
business in which the Optionholder works,

	 	 	in each case whether or not the personal information is transferred from one country to
another country, and the Optionholder consents to all such use and disclosure of all such
personal information.
	 
	11.	 	Changing the Plan and Termination

 

	11.1	 	Variations and amendments
	 
	 	 	Subject to the Corporations Act and the ASX Listing Rules, 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 an
Optionholder subsisting
prior to the making of the amendment.
	 
	11.2	 	Notice
	 
	 	 	After making any variation, the Committee will give written notice to any Optionholder affected by the variation.
	 
	11.3	 	Termination of the Plan
	 
	 	 	The Committee may terminate the Plan at any time. If this is not done, the Plan will
terminate on 22 April 2014, but Options granted before such termination will continue to
be valid and exercisable as described in these Rules.
	 
	12.	 	Governing Law

 

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

Page 14

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