BCSC

Exemption Orders (Discretionary)

RIO TINTO PLC

2001 BCSECCOM 949

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Relief granted from the prospectus and registration requirements for trades of securities under a stock option plan - relief also granted for subsequent trades of securities acquired by employees and former employees, subject to certain conditions.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 48, 61 and 76

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, ONTARIO, QUÉBEC, NEWFOUNDLAND, THE NORTWEST TERRITORIES AND THE YUKON TERRITORY

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF RIO TINTO PLC

AND

IN THE MATTER OF RIO TINTO LIMITED

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta, Ontario, Québec, Newfoundland, Northwest Territories and Yukon Territory (the “Jurisdictions”) has received an application from Rio Tinto plc and Rio Tinto Limited (together, the “Issuers” and individually, an “Issuer”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the requirements contained in the Legislation to be registered to trade in a security (the “Registration Requirement”) and to file and obtain a receipt for a preliminary prospectus and a prospectus in respect of such security (the “Prospectus Requirement”) shall not apply to certain trades of securities of the Issuers under each Issuer’s International Share Savings Plan, as such Plan may be amended, supplemented or superseded from time to time (individually, a “Plan” and collectively, the “Plans”) and the subsequent first trade in ordinary shares of the Issuers (collectively, the “Shares” and individually, a “Share”) acquired under the Plans by holders in the Jurisdictions;

AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”) the Commission des valeurs mobilieres du Québec is the principal regulator for this application;

AND WHEREAS the Issuers have represented to the Decision Makers that:

1. Rio Tinto plc is a company incorporated pursuant to the laws of England and Wales with its head office in London, England, while Rio Tinto Limited is a company incorporated under Australian law with an office in Melbourne, Australia;

2. the Issuers are registered with the Securities Exchange Commission (the “SEC”) in the United States of America under the United States Securities Exchange Act of 1934 (the “Exchange Act”), but are exempt from the reporting requirements of the Exchange Act pursuant to Rule 12G 3-2 made thereunder;

3. neither Issuer is a reporting issuer or its equivalent in any of the Jurisdictions and neither has any present intention of becoming one;

4. the authorised capital of Rio Tinto plc includes 1,421,232,830 Shares, of which approximately 1.06 billion Shares were issued and outstanding as of June 30, 2001. Rio Tinto Limited had approximately 498.4 million Shares issued and outstanding as of June 30, 2001;

5. Shares of Rio Tinto plc are listed and posted for trading on the London, EuroNext and Deutsche Borse Stock Exchanges, while Shares of Rio Tinto Limited are listed in Australia and New Zealand. Both Issuers have sponsored American Depositary Share (“ADS”) programs. ADSs of Rio Tinto plc are traded on the New York Stock Exchange, while ADSs of Rio Tinto Limited are traded over-the-counter in the United States of America;

6. as of June 30, 2001, to the best of the knowledge of each of the Issuers, holders of such Issuer’s Shares resident in a Jurisdiction did not hold, directly or indirectly, more than 2% of the total outstanding Shares of that Issuer and all such holders of such Issuer’s Shares in Canada did not hold more than 10% of the total outstanding Shares of that Issuer nor did the aggregate number of holders of an Issuer’s Shares in Canada exceed 10% of the total number of holders of its Shares;

7. full-time employees in Canada (“Eligible Employees”) of an Issuer or an Affiliate of an Issuer (as defined in the Legislation) who have worked for a qualifying period and who are not eligible to participate in any other Issuer related share savings schemes will be eligible to participate in the Plans;

8. Eligible Employees will be provided with information relating to the Plans, which includes an offer by the Issuer to apply for options (“Options”) to purchase Shares of the Issuer at the Exercise Price (as defined below);

9. an Eligible Employee who elects to participate in a Plan (a “Participant”) will not be induced or required to participate in the Plan by expectation of or as a condition of employment or continued employment with the Issuer or its Affiliate;

10. Participants can join a Plan by signing an application form to establish a savings contract (a “Savings Contract”) with a designated savings carrier (the “Savings Carrier”). Participants will pay by payroll deduction a stated monthly contribution to an interest bearing savings account with the Savings Carrier for an elected term;

11. the exercise price of an Option (the “Exercise Price”) will not be at less than 80% of the Market Value (as defined in the Plans) of a Share over the three business days immediately preceding the date of the invitation to participate, or such other date as determined by the board of directors of the Issuer;

12. the funds saved pursuant to the Savings Contract, together with the interest earned may be used to buy Shares on behalf of the Participant upon exercise of Options, or may be withdrawn by the Participant at any time. If the Participant chooses to discontinue his or her Savings Contract, he or she will no longer be entitled to the Options;

13. Shares to be acquired upon exercise of Options under the Plans will either be newly issued Shares or previously issued Shares of the Issuer acquired on the secondary market;

14. the Issuers will engage the services of an agent (an “Agent”) to provide the Issuer with assistance in transferring previously issued Shares of the Issuer to Participants upon exercise of Options and to provide Participants with day-to-day brokerage services in connection with the resale of Shares acquired upon exercise of Options;

15. the Agent will be authorised or qualified to trade in securities under applicable legislation in the foreign jurisdiction in which the Shares are traded, but will not be registered to trade in securities under the Legislation;

16. while the Savings Carrier will collate all applications for participation under the Plans and maintain the records of a Participant’s Savings Contract, all communications with Eligible Employees and Participants will be done through the Issuer and its Affiliates at all stages of the Plan;

17. when Options are exercised, the Issuers will co-ordinate the issuance or transfer of Shares with the Agent through the facilities of a stock exchange or organised market outside of Canada, and since there is no market in the Jurisdictions for the Shares and none is expected to develop, the Issuers expect that any resale of Shares acquired under the Plans will be made through the Agent through the facilities of and in accordance with the rules of a stock exchange or organised market outside of Canada;

18. the aggregate number of Shares that may be allocated under the Plans on any day, shall not, when added to the total number of Shares that have been allocated in the previous 10 years (5 years in the case of the Plan of Rio Tinto Limited) under any employee share scheme operated by the Issuer, exceed 10% (5% in the case of the Plan of Rio Tinto Limited) of the outstanding Shares of the Issuer immediately before that day;

19. the Plans will not allow the total number of Shares to be reserved for issuance under Options for any one Participant to exceed 5% of the total outstanding Shares of an Issuer;

20. while Options will generally only be exercisable for a period of six (6) months after the termination of the Savings Contract, Options held by a Participant who ceases to be an Eligible Employee in certain circumstances such as injury, disability, redundancy, retirement or death, will become exercisable by the former employee for a period of six (6) months after such Participant’s termination of employment or, where the Participant dies, by the Participant’s personal representatives for a period of 12 months after such Participant’s death, or if earlier, the termination of the Savings Contract, after which time such Options will immediately lapse.

21. except for the transmission of an Option on the death of a Participant to the Participant’s personal representatives, neither an Option nor any rights in respect of it may be transferred, assigned or otherwise disposed of by a Participant to any other person; and

22. residents in the Jurisdictions who acquire Shares under a Plan will be provided with all disclosure material relating to the applicable Issuer that is provided to holders of Shares of that Issuer resident in the governing jurisdiction of that Issuer;

AND WHEREAS under the System this Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

The Registration Requirements shall not apply to trades in Options or Shares where such trades are in accordance with the provisions of the applicable Plan, and shall not apply to the first trade in Shares acquired under the Plans provided such trade is executed through the facilities of a stock exchange or on an organized market outside of Canada through an Agent and in accordance with the laws applicable to such exchange or market.

Dated this 25th day of September, 2001.

Jean-François Bernier
Le directeur des marchés des capitaux

THE DECISION of the Decision Makers pursuant to the Legislation is that:

(a) The Prospectus Requirements shall not apply to trades in Options and Shares under the Plans where such trades are in accordance with the provisions of the Plans, as applicable.

(b) The first trade in Shares acquired under the Plans shall be subject to the Prospectus Requirements unless such trade is executed through the facilities of a stock exchange or on an organized market outside of Canada and in accordance with the laws applicable to such exchange or market.

(c) A French-language offering notice required pursuant to the Regulation respecting securities (Québec) must be distributed to all Participants in Québec.

Dated this 25th day of September, 2001.

Josée Deslauriers
Le chef du service du financement des sociétés