Document:

EX-4.3

 

Exhibit 4.3

RULES OF THE RIO TINTO SHARE OPTION PLAN 2004

	 	 	 
	Shareholders’ Approval:

	 	22 April 2004
	 
	 	 
	Directors’ Adoption:

	 	22 April 2004
	 
	 	 
	Expiry Date:

	 	22 April 2014

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

Ref 01/145/A Croft

 

 

RULES OF THE RIO TINTO SHARE OPTION PLAN 2004

	1	 	Meanings Of Words Used
	 
	 	 	In these Rules:
	 
	 	 	“Business Day” means a day on which the London Stock Exchange is open for the transaction
of business;
	 
	 	 	“Company” means Rio Tinto plc;
	 
	 	 	“Committee” means the Remuneration Committee of the board of directors of the Company as
constituted from time to time;
	 
	 	 	“Control” has the meaning given to it by Section 840 of the Income and Corporation Taxes
Act 1988;
	 
	 	 	“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:

	 	(i)	 	the Company; and
	 
	 	(ii)	 	its Subsidiaries from time to time; and
	 
	 	(iii)	 	any other company which is associated with the Company and is
designated by the Committee as a Member of the Group;

	 	 	“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.

	 	(i)	 	the Company; and
	 
	 	(ii)	 	any Subsidiary and any other company which is designated by the
Committee as a Participating Company.

	 	 	“Performance Condition” means any condition or conditions imposed under Rule 2.3;

	 
	 	 	“Rules” means these rules as changed from time to time;
	 
	 	 	“Plan” means this Plan known as “The Rio Tinto Share Option Plan 2004”;

	 
	 	 	“Shares” means fully paid ordinary shares in the capital of the Company; and
	 
	 	 	“Subsidiary” means a company which is a subsidiary of the Company within the meaning given
by Section 736 of the Companies Act 1985.

 

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	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 middle market quotations shown on the Official List of the London 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 London 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 plans 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, regulation or government directive, or by any code adopted by the
Company based on the London Stock Exchanges model code for securities transactions by
directors of listed companies, the Committee may grant Options within 42 days after
the lifting of such restrictions.

	2.3	 	Performance Condition:
	 
	 	 	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.

	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.

 

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	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. 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 the Committee tries to grant an Option which is inconsistent with Rule 4 (plan limits),
the Option 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:
	 
	 	 	3.1.1     not less than the market value of a Share on the Date of Grant; and
	 
	 	 	3.1.2     if the Shares are to be subscribed, not less than the nominal value of a Share.

	3.2	 	Market value:
	 
	 	 	“Market value” for the purpose of this Rule on any particular day means the average of the
middle market quotations (as derived from the Daily Official List of the London 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 per cent. 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 in 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 plan operated by the Company.
	 
	4.2	 	5 per cent. 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 in 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 plan adopted by the Company.

 

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	4.3	 	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.
	 
	4.4	 	Meaning of Allocate:
	 
	 	 	“Allocate” means, in relation to any share option plan, placing unissued Shares or treasury
Shares under option and, in relation to other types of employee share plan, the issue and
allotment of Shares or the transfer of Shares out of treasury.
	 
	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:

	 	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	 	Nominal Value:
	 
	 	 	The Option Price of an Option to acquire existing Shares may be adjusted to a price which
is less than the nominal value. The Option Price of an Option to subscribe for new Shares
may only be adjusted to a price less than the nominal value, if the Committee resolves to
capitalise the reserves of the Company in an amount equal to the difference between the
adjusted Option Price and the nominal value of the Shares on the date of allotment.
	 
	5.3	 	Notice:
	 
	 	 	The Committee may notify Optionholders of any adjustment made under this Rule 5.
	 
	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;

 

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	 	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).
	 
	 	6.2.4	 	For the purposes of Rule 6.2.1 above, 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 from the date of cessation or one year from 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 Limited or one of its subsidiaries;
	 
	 	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	 	Restriction on exercise:
	 
	 	 	Except in the case of a transfer as contemplated by Rule 7.1.3, any Option which has 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.
	 
	7.4	 	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 as at the date Control is obtained, within the 6 month period after the

 

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	 	 	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.
	 
	 	 	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, 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:
	 
	 	 	This Rule applies when, under section 425 of the Companies Act 1985 or any other
equivalent local legislation:

	 	7.5.1	 	a court sanctions a compromise or arrangement in connection with the
acquisition of Shares; or
	 
	 	7.5.2	 	there is any other local equivalent to that sanction procedure.

	 	 	When this Rule applies, Options may be exercised, subject to the satisfaction of any
Performance Condition measured as at the date of court sanction, within 6 months after the
date of the sanction. Any Option not so exercised will lapse at the end of that period.
	 
	 	 	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.
	 
	7.6	 	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 its 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.
	 
	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 Insolvency Act 1986
(but the exercise of any Option in these circumstances will be of no effect if the
resolution

 

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	 	 	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; or
	 
	 	8.1.3	 	becomes bound or entitled to compulsorily acquire Shares.

	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.
	 
	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.

 

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	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.

	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 the
Condition to which the Option is subject has been satisfied, or waives the
Condition.
	 
	 	 	 	This paragraph (ii) will only apply if the Option is subject to a
Condition. The Committee must make a decision about the satisfaction or
waiver of the Condition within 14 days of receiving the documents and
payment.

	 	9.3.2	 	If any statute, regulation or code adopted by the Company (based on the
London Stock Exchange’s Model Code for security transactions by directors of listed
companies), 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

 

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	 	 	 	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.
	 
	9.5	 	Cash alternative:
	 
	 	 	The Committee may in its discretion determine not to procure the 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 (consents):

	 	9.6.1	 	Shares to be issued or transferred out of treasury following the exercise
of an Option will be issued or transferred within 30 days of the Option Exercise
Date.
	 
	 	9.6.2	 	The Committee will procure the transfer of Shares to be transferred
following the exercise of an Option within 30 days of 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 in 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.
	 
	 	9.7.2	 	Where Shares are to be transferred on the exercise of an Option, including
transfer out of treasury, 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 the United
Kingdom 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	 	Articles of Association:
	 
	 	 	Any Shares acquired on the exercise of Options will be subject to the Articles of
Association 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 London Stock Exchange,
the Company will apply for listing of any Shares issued under the Plan as soon as
practicable after their allotment.

 

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	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.

	 
	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 person.
	 
	 	10.6.2	 	This Rule applies:

	 	(i)	 	whether the Company has full discretion in the operation of the Plan, or
whether the 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
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 or a
continued employment relationship.

 

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	 	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 Condition, 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);
	 
	 	(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 Participant
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 Condition, 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 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.
	 
	 	10.6.10	 	Each of the provisions of this Rule is entirely separate and independent from each
of the other provisions. If 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.

 

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	10.8	 	Withholding:
	 
	 	 	The Company, any employing company or the trustees of any employee benefit trust 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	 	Data protection
	 
	 	 	By participating in the Plan the Optionholder consents to the holding and processing of
personal data provided by the Optionholder to the Company for all purposes relating to the
operation of the Plan. These include, but are not limited to:

	 	10.9.1	 	administering and maintaining Optionholder records;
	 
	 	10.9.2	 	providing information to trustees of any employee benefit trust, registrars,
brokers or third party administrators of the Plan;
	 
	 	10.9.3	 	providing information to future purchasers of the Company or the business in which
the Optionholder works;
	 
	 	10.9.4	 	transferring information about the Optionholder to a country or territory outside
the European Economic Area.

	11	 	Changing the Plan and Termination
	 
	11.1	 	Committee’s powers:
	 
	 	 	Except as described in the rest of this Rule the Committee may at any time change the Plan
in any way.
	 
	11.2	 	Shareholder approval:

	 	11.2.1	 	Except as described in Rule 11.2.2, the Company in general meeting must approve
in advance any proposed change to the Rules to the advantage of present or future

Optionholders, which relates to the following:

	 	(i)	 	the persons to or for whom Shares may be provided under the Plan;
	 
	 	(ii)	 	the limitations on the number of Shares which may be issued
under the Plan;
	 
	 	(iii)	 	the determination of the Option Price;
	 
	 	(iv)	 	any rights attaching to the Options and the Shares;
	 
	 	(v)	 	the rights of Optionholders in the event of a capitalisation
issue, rights issue, subdivision or consolidation of shares or reduction or
any other variation of capital of the Company;
	 
	 	(vi)	 	the terms of this Rule 11.2.1.

	 	11.2.2	 	The Committee need not obtain the approval of the Company in general meeting
for any minor changes to the Rules:

	 	(i)	 	to benefit the administration of the Plan;

 

12

 

	 	(ii)	 	to comply with or take account of the provisions of any proposed or
existing legislation;
	 
	 	(iii)	 	to obtain or maintain favourable tax, exchange control or
regulatory treatment of the Company, any Subsidiary or any present or future
Optionholder.

	11.3	 	Optionholders’ Rights:
	 
	 	 	The net effect of any amendment to the Rules must not prejudice the rights of an
Optionholder existing before the amendment was made.
	 
	11.4	 	Overseas Employees:
	 
	 	 	Notwithstanding any other provision of the Plan, the Committee may amend or add to the
provisions of the Plan and the terms of Options as it considers necessary or desirable to
take account of, or to mitigate, or to comply with relevant overseas taxation, securities
or exchange control laws, provided that the terms of Options granted to such Eligible
Employees are not more favourable overall than the terms of Options granted to other
Eligible Employees.
	 
	11.5	 	Notice:
	 
	 	 	After making any change, the Committee will give written notice to any Optionholder
affected by the change.
	 
	11.6	 	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
	 
	 	 	English law governs the Plan and all Options and their construction.

 

13

 

Schedule

The Rio Tinto Inland Revenue Approved Share Option Plan 2004

(Inland Revenue Reference: X226854)

This schedule contains the rules of the Rio Tinto Inland Revenue Approved Share Option Plan 2004
(the “Approved Plan”). The Rules of the Rio Tinto Share Option Plan 2004 (the “Plan”) as amended by
this schedule apply to Options granted under the Approved Plan. The Committee may only grant
Options under the Approved Plan after the Approved Plan has been approved by the Inland Revenue.

	1	 	Definitions
	 
	 	 	Words used in the Approved Plan have the same meaning as in the Plan unless amended as
stated below:
	 
	 	 	“Eligible Employee” does not include anyone who is:

	 	(i)	 	excluded from participation because of paragraph 9 of ITEPA (material interests
provisions); or
	 
	 	(ii)	 	a director who is required to work less than 25 hours a week
(excluding meal breaks) for the Company.

	 	 	 	“ITEPA” means Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003;
	 
	 	 	 	“Participating Companies” means:

	 	(i)	 	the Company and any Subsidiary; and
	 
	 	(ii)	 	any jointly-owned company (within the meaning of paragraph 34
ITEPA) designated by the Committee; and
	 
	 	(iii)	 	any other entity designated by the Committee which the Inland Revenue
agree may participate.

	 	 	 	“Shares” must satisfy paragraphs 16 to 20 of ITEPA;
	 
	 	 	 	“Subsidiary” must be under the Control of the Company.

	2	 	Shares
	 
	 	 	The following new Rule is added:
	 
	 	 	“If any Shares which are subject to an Option cease to satisfy paragraphs 16 to 20 of ITEPA
and the Committee notify the Inland Revenue that they wish the Approved Plan to be
disapproved then the definition of “Shares” in Rule 1.1 is changed automatically to “fully
paid ordinary shares in the capital of the Company”.”
	 
	3	 	Grant of Options
	 
	3.1	 	The following sentence is added to the end of Rule 2.1: 
	 
	 	 	“The
Company will execute a deed on the grant of an option.”
	 
	3.2	 	Rule 2.4 is replaced with the following:

 

14

 

	 	“2.4	 	Option Certificates
	 
	 	 	 	The Directors will send to each Optionholder an option certificate on or as soon as
practicable after the Date of Grant. The certificate will either be the deed
referred to in Rule 2.1 or a statement. The Directors will set the form of the
certificate, but the certificate must be consistent with these rules.”

	3.3	 	The following rule replaces Rule 2.8:

	 	“2.8	 	Administrative errors
	 
	 	 	 	If the Directors try to grant an Option which is inconsistent with Rule 6 (Plan
Limits) or Inland Revenue limits specified under the Approved Plan, the Option
will be limited and will take effect from the Date of Grant on a basis consistent
with that Rule.”

	4	 	Option Price
	 
	4.1	 	The following rule replaces Rule 3.1.1:

	 	“3.1.1 	 	not less than Market Value of a Share on the Date of Grant or such other
date as the Inland Revenue may agree in advance; and”

	4.2	 	The following rule replaces Rule 3.2:

	 	“3.2 	 	Market value
	 
	 	 	 	“Market Value” on any particular day means:

	 	3.2.1	 	where Shares of the same class are not admitted to the
Official List of the UK Listing Authority, the market value of a share
calculated as described in Part VIII of the Taxation of Chargeable Gains Act
1992 and agreed in advance with Shares Valuation at the Inland Revenue; and
	 
	 	3.2.2	 	where Shares of the same class are so listed and traded on
the London Stock Exchange:

	 	(i)	 	their middle market quotation on the
immediately preceding Business Day; or
	 
	 	(ii)	 	the average of the middle market quotation
on the 5 immediately preceding Business Days;
	 
	 	(iii)	 	or such other price as may be agreed in
advance with Shares Valuation at the Inland Revenue.

	 	 	 	The middle market quotation is taken from the Daily Official List of the
London Stock Exchange.”

	5	 	Revenue limit
	 
	 	 	The following new Rule is added:
	 
	 	 	“The Committee must not grant an Option to an Eligible Employee which would cause the
aggregate market value of:

	 	(i)	 	the Shares subject to that Option; and
	 
	 	(ii)	 	the Shares which he may acquire on exercising his Options under the
Approved Plan; and

 

15

 

	 	(iii)	 	the shares which he may acquire on exercising his options under any other
Inland Revenue approved discretionary scheme established by the Company or by any
of its associated companies (as defined in paragraph 35 of ITEPA)

	 	 	to exceed the amount permitted under paragraph 6(1) of ITEPA (currently £30,000). For the
purposes of this paragraph, market value is calculated as at the date of grant of the
options as described in the relevant plan rules.”

	6	 	Adjustment of Options
	 
	 	 	The following rule replaces Rule 5.1:

	 	 	 	“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, the number of Shares comprised in each Option and the Option Price may be
adjusted in any way (including retrospective amendments) that the Committee
considers appropriate. However, no adjustment of Options may be made under this
Rule 5 without the prior approval of the Inland Revenue.”

	7	 	Material interest
	 
	 	 	The following new Rule is added:
	 
	 	 	“An Optionholder may not exercise an Option while he is excluded from participation in the
Approved Plan under paragraph 9 of ITEPA (material interest provisions).”

	8	 	Exercise and lapse — exceptions to the general rules
	 
	8.1	 	The following is added at the end of Rule 7.1:
	 
	 	 	“For the purposes of paragraph 35A of ITEPA the specified age is 55”.
	 
	8.2	 	For the purposes of Rule 7.1.2, “redundancy” is within the meaning of the Employment Rights
Act 1996.
	 
	8.3	 	The following rule replaces Rule 7.2:

	 	7.2	 	“Death
	 
	 	 	 	If an Optionholder dies, his Options may be exercised by his personal
representatives within 12 months after his death, subject to the restriction in
Rule 7.3, and lapses to the extent not exercised. This is irrespective of the
satisfaction of any Performance Condition.”

	8.4	 	In Rules 7.4 and 7.5, the following paragraph is deleted:
	 
	 	 	“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.”
	 
	 	 	and replaced with:
	 
	 	 	“Unless the Committee acting fairly and reasonably decides otherwise, Options may not be
exercised if an exchange offer is proposed to be made in accordance with Rule 8.”
	 
	8.5	 	The following new Rule is added as Rule 7.9:

 

16

 

	 	7.9	 	“Discretion
	 
	 	 	 	If the Committee exercise any discretion under Rules 7 and 8 they must do so fairly
and reasonably.”

	9	 	Exchange of Options
	 
	 	 	The following rule replaces Rule 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 Offeror Company will have
Control of the Company; or
	 
	 	(ii)	 	all the Shares (or those Shares not already owned by the
Offeror 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 425 of the Companies Act 1985 or other local sanction
procedure which the Inland Revenue agrees is equivalent; or
	 
	 	8.1.3	 	becomes bound or entitled to acquire Shares under Sections 428 to 430F of
the Companies Act 1985 or other local legislation which the Inland Revenue agrees is
equivalent.
	 
	 	8.2	 	Exchange

	 
	 	 	If this Rule 8 applies, Options may be exchanged within the period referred to in paragraph
26(3) of ITEPA and with the agreement of the company offering the exchange.

	 
	 	8.3	 	Exchange terms

	 
	 	Where an Option is to be exchanged the Optionholder will be granted a new option to replace
it, and:

	 
	 	8.3.1	 	the new Option will be in respect of shares, which satisfy the conditions of
paragraph 27(4) of ITEPA, in any body corporate (falling within paragraph 16(b) or (c)
of ITEPA) determined by the Committee or in the absence of any such determination, by
the Acquiring Company;
	 
	 	8.3.2	 	the new option will be equivalent to the Option that was exchanged;
	 
	 	8.3.3	 	the new option will be treated as having been acquired at the same time as
the Option that was exchanged and will be exercisable in the same manner and at the
same time;
	 
	 	8.3.4	 	the new option will be subject to the Rules as they last had effect in
relation to the Option that was exchanged except that, unless the Acquiring Company
decides otherwise, the Conditions will not apply; and

 

17

 

	 	8.3.5	 	with effect from exchange, the Rules are construed in relation to the new
option as if references to Shares were references to the shares over which the
new option is granted and references to the Company are references to the body
corporate determined under Rule 8.3.1, and Rule 11.2 (shareholder approval for
amendments) does not apply.”

	10	 	Cash alternative
	 
	 	 	Rule 9.5 is deleted.
	 
	11	 	Withholding
	 
	 	 	The following will replace Rule 10.8:
	 
	 	 	“Unless the Optionholder discharges any liability that may arise himself, the Company, any
employing company or the trustee of any employee benefit trust from which Shares are
provided may make the necessary arrangements to withhold an amount sufficient to meet any
liability to taxation or social security contributions in respect of the exercise of Options
for which the Company is obliged to account on behalf of an Optionholder. These arrangements
may include the sale or reduction in number of sufficient Shares on behalf of an
Optionholder.”
	 
	12	 	Changing the Plan
	 
	 	 	Rule 11.2 is amended by the following new Rule:
	 
	 	 	“The approval of the Company in general meeting is not needed for any changes which are
necessary or desirable in order to maintain Inland Revenue approval of the Approved Plan
under ITEPA any other enactment.”
	 
	13	 	Revenue approval
	 
	 	 	The following new Rule is added:
	 
	 	 	“11.3 Revenue approval
	 
	 	 	If the approved status of the Approved Plan is to be maintained, any change to the
Approved Plan which requires Inland Revenue approval will not take effect until it is
approved by the Inland Revenue.”

 

18EX-4.4

 

Exhibit 4.4

RULES OF THE

RIO TINTO MINING COMPANIES COMPARATIVE

PLAN 2004

	 	 	 
	Shareholders’ Approval:

	 	22 April 2004
	Directors’ Adoption:

	 	22 April 2004

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

Ref 01/145/A Croft

 

 

RIO TINTO PLC MINING COMPANIES COMPARATIVE PLAN 2004

	1	 	Definitions and Interpretation
	 
	1.1	 	In this Plan unless the context otherwise requires:
	 
	 	 	“Award” means the receipt of Shares as described in Rule 4.4;
	 
	 	 	the “Committee” means the Remuneration Committee of the board of directors of the Company as
constituted from time to time;
	 
	 	 	the “Company” means Rio Tinto plc (registered in England and Wales No. 719885);
	 
	 	 	“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 Letters” means a notification of participation in the Plan given under
Rule 4.1;
	 
	 	 	“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 or product group chief executive of the Company, 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;
	 
	 	 	the “Plan” or “MCCP” means the Rio Tinto plc Mining Companies Comparative Plan 2004 as
herein set out but subject to any alterations or additions made under Rule 9 below;
	 
	 	 	“Shares” means ordinary shares in the Company;
	 
	 	 	“Subsidiary” means a body corporate which is a subsidiary of the Company within the meaning
of section 736 of the Companies Act 1985.

	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.

 

1

 

	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 middle market quotations shown in the Official List of the London 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 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 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.

 

2

 

	4.8	 	Any Participant who is a director of the Company or a product group chief executive at the
time a Conditional Award Letter is delivered to him and who is entitled to receive a number of
Shares (or an equivalent cash amount) calculated under Rule 4.4 (as modified or reduced pro
rata under Rule 5 or Rule 6 if applicable), shall be paid a cash amount, subject to deduction
of applicable tax and social security payments, [as soon as practicable after the number of
Shares has been calculated]. The cash amount is the aggregate net 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
Shares after their transfer to the Participant.

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:

	 	5.2.1	 	ill-health, injury, or disability (as determined by the Participant’s employer);
	 
	 	5.2.2	 	redundancy;
	 
	 	5.2.3	 	transfer to Rio Tinto Limited or one of its subsidiaries;
	 
	 	5.2.4	 	retirement (by agreement with the Participant’s employer);
	 
	 	5.2.5	 	his employing company ceasing to be under the control of the Company; or
	 
	 	5.2.6	 	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:

	 	5.3.1	 	the number of Shares which would be delivered if the Performance Condition
were satisfied at the median level; and
	 
	 	5.3.2	 	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.

 

3

 

	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 (if the acquiring company agrees).
	 
	6.4	 	Rule 4.6 shall not apply to Awards made under this Rule 6.
	 
	7	 	Variation of Conditional Awards
	 
	7.1	 	The Committee may make such adjustments as it considers appropriate, if any, to:

	 	7.1.1	 	the number of Shares subject to a Conditional Award;
	 
	 	7.1.2	 	the terms of a Performance Condition;
	 
	 	7.1.3	 	the number of Shares which a Participant is obliged to hold pursuant to Rule
4.7; and/or
	 
	 	7.1.4	 	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:

	 	7.2.1	 	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 a demerger (in whatever form);
	 
	 	7.2.2	 	a special distribution, including a distribution in specie, made by the
Company to its shareholders;
	 
	 	7.2.3	 	a takeover, demerger or other reconstruction (excluding liquidation or
receivership) of any other Company with which the Company’s performance is compared;
	 
	 	7.2.4	 	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 in issue immediately before that day,

 

4

 

	 	 	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 in 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	 	“Allocate” means, in relation to any share option scheme, placing unissued shares or treasury
Shares under option and, in relation to other types of employee share scheme, the issue and
allotment of shares or the transfer of Shares out of treasury.
	 
	9	 	Variation of Plan Rules

	9.1	 	Except as described in the rest of this Rule 9, the Committee may at any time alter or add to
all or any of the rules of the Plan, in any respect.

	9.2	 	Except as described in Rule 9.3, the Company in general meeting must approve in advance any
proposed change to the rules of the Plan which would be to the advantage of present or future
Participants, and which relates to the following:

	 	9.2.1	 	the persons who are eligible to participate in the Plan;
	 
	 	9.2.2	 	the maximum individual limit for a Conditional Award to a Participant under
Rule 4.3;
	 
	 	9.2.3	 	the limitations in Rule 8 on the number of Shares which may be issued under
the Plan;
	 
	 	9.2.4	 	the provisions of Rule 7 relating to the position of Participants in the event
of a capitalisation issue, rights issue, sub-division or consolidation of Shares or
reduction or any other variation of capital of the Company;
	 
	 	9.2.5	 	the terms of this Rule 9.2.

	9.3	 	The Committee need not obtain the approval of the Company in general meeting for the
following minor changes to the rules of the Plan:

	 	9.3.1	 	to benefit the administration of the Plan;
	 
	 	9.3.2	 	to comply with or take account of the provisions of any proposed or existing
legislation or regulations or to take account of any changes; or
	 
	 	9.3.3	 	to obtain or maintain favourable tax, exchange control or regulatory treatment
of the Company, any Subsidiary, or any present or future Participant.

	9.4	 	The net effect of any amendment to the Rules must not prejudice the rights of a Participant
existing before the amendment was made.

	9.5	 	Notice of any alteration or addition shall be given to any Participant affected thereby.
	 
	10	 	Miscellaneous
	 
	 	 	By participating in the Plan the Participant consents to the holding and processing of
personal data provided by the Participant to the Company for all purposes relating to the
operation of the Plan. These include, but are not limited to:

 

5

 

	 	10.1.1	 	administering and maintaining Participant records;
	 
	 	10.1.2	 	providing information to trustees of any employee benefit trust, registrars, brokers
or third party administrators of the Plan;
	 
	 	10.1.3	 	providing information to future purchasers of the Company or the business in which
the Participant works;
	 
	 	10.1.4	 	transferring information about the Participant to a country or territory outside the
European Economic Area.

	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 xxx 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 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 is not entitled to rights before that date.

	10.6	 	The Company may satisfy Awards by the issue of Shares, by the transfer of Shares out of
treasury, by the transfer of Shares out of an employee trust, 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 the United Kingdom 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 Articles of
Association 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 London 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, any Eligible Employee or any
other person.
	 
	11.2	 	This Rule applies:

	 	11.2.1	 	whether the Company has full discretion in the operation of the Plan, or whether the
Company could be regarded as being subject to any obligations in the operation of the
Plan;
	 
	 	11.2.2	 	during an Employee’s employment or employment relationship; and
	 
	 	11.2.3	 	after the termination of an Employee’s employment or employment relationship, whether
the termination is lawful or unlawful.

 

6

 

	11.3	 	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 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 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 Rules and the Performance Condition, 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 Employee and 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:

	 	11.7.1	 	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);
	 
	 	11.7.2	 	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;
	 
	 	11.7.3	 	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 Rules, 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 Rules and the Performance
Condition, in consideration for, and as a condition of, the grant of a Conditional Award under
the Plan.

	11.9	 	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.

	11.10	 	Each of the provisions of this Rule is entirely separate and independent from each of the
other provisions. If 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.
	 
	12	 	Governing Law
	 
	 	 	English Law governs the Plan and all Awards and their construction.

 

7

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