Item 6. Indemnifi
cation o
f Directors and Officers
Deeds of Indemnity
Directors appointed have entered into deeds of indemnity with Rio Tinto plc and Rio Tinto Limited as follows: Ann Godbehere on 9 February 2010, Chris Lynch on 1 September 2011, Simon Thompson on 15 April 2014, Michael L’Estrange on 16 September 2014, Megan Clark on 26 November 2014, Jean-Sébastien Jacques on March 17, 2016, David Constable on February 10, 2017, Sam Laidlaw on February 10, 2017 and Simon Henry on April 1, 2017. On January 9, 2017, Rio Tinto plc and Rio Tinto Limited each entered into deeds of indemnity with Steve Allen, Company Secretary of Rio Tinto plc and Joint Company Secretary of Rio Tinto Limited. On September 26, 2013, Rio Tinto Limited entered into a deed of indemnity with Tim Paine, Joint Company Secretary of Rio Tinto Limited.
Australian Law
Corporation Act of Australia
Section 199A(1) of the Corporations Act 2001 (Commonwealth) (the “Corporations Act”) provides that a company or a related body corporate must not exempt a person from a liability to the company incurred as an officer of the company.
Section 199A(2) of the Corporations Act provides that a company or a related body corporate must not indemnify a person against any of the following liabilities incurred as an officer of the company:
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a liability owed to the company or a related body corporate;
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a liability for a pecuniary penalty order or compensation order under specified provisions of the Corporations Act; or
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a liability that is owed to someone other than the company or a related body corporate that did not arise out of conduct in good faith.
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Section 199A(2) does not apply to a liability for legal costs.
Section 199A(3) provides that a company or a related body corporate must not indemnify a person against legal costs incurred in defending an action for a liability incurred as an officer of the company if the costs are incurred:
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in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under Section 199A(2); or
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in defending or resisting criminal proceedings in which the person is found guilty; or
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in defending or resisting proceedings brought by the Australian Securities and Investments Commission (ASIC) or a liquidator for a court order if the grounds for making the order are found by the court to have been established (this does not apply to costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order); or
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in connection with proceedings for relief to the person under the Corporations Act in which the court denies the relief.
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Section 199B of the Corporations Act provides that a company or a related body corporate must not pay, or agree to pay, a premium for a contract insuring a person who is or has been an officer of the company against a liability (other than one for legal co
sts) arising out of:
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conduct involving a willful breach of any duty in relation to the company; or
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a contravention of the officer’s duties under the Corporations Act not to improperly use their position or make improper use of information obtained as an officer.
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For the purpose of Sections 199A and 199B, an “officer” of a company includes:
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a director or secretary;
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a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the company;
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a person who has the capacity to significantly affect the company’s financial standing; and
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a person in accordance with whose instructions or wishes the directors of the company are accustomed to act.
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English law
Sections 232 to 236 of the Companies Act 2006 provide as follows:
“232. Provisions protecting directors from liability
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(1)
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Any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
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(2)
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Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted by —
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(a)
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section 233 (provision of insurance),
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(b)
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section 234 (qualifying third party indemnity provision), or
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(c)
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section 235 (qualifying pension scheme indemnity provision).
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(3)
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This section applies to any provision, whether contained in a company’s articles or in any contract with the company or otherwise.
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(4)
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Nothing in this section prevents a company’s articles from making such provision as has previously been lawful for dealing with conflicts of interest.
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233. Provision of insurance
Section 232(2) (voidness of provisions for indemnifying directors) does not prevent a company from purchasing and maintaining for a director of the company, or of an associated company, insurance against any such liability as is mentioned in that subsection.
234. Qualifying third party indemnity provision
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(1)
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Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying third party indemnity provision.
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(2)
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Third party indemnity provision means provision for indemnity against liability incurred by the director to a person other than the company or an associated company.
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Such provision is qualifying third party indemnity provision if the following requirements are met.
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(3)
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The provision must not provide any indemnity against —
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(a)
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any liability of the director to pay —
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(i)
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a fine imposed in criminal proceedings, or
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(ii)
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a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or
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(b)
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any liability incurred by the director —
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(i)
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in defending criminal proceedings in which he is convicted, or
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(ii)
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in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or
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(iii)
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in connection with an application for relief (see subsection (6)) in which the court refuses to grant him relief.
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(4)
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The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final decision in the proceedings.
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(a)
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a conviction, judgment or refusal of relief becomes final —
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(i)
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if not appealed against, at the end of the period for bringing an appeal, or
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(ii)
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if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
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(b)
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an appeal is disposed of —
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(i)
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if it is determined and the period for bringing any further appeal has ended, or
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(ii)
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if it is abandoned or otherwise ceases to have effect.
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(6)
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The reference in subsection (3)(b)(iii) to an application for relief is to an application for relief under —
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section 661(3) or (4) (power of court to grant relief in a case of acquisition of shares by innocent nominee), or
section 1157 (general power of court to grant relief in case of honest and reasonable conduct).
235. Qualifying pension scheme indemnity provision
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(1)
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Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying pension scheme indemnity provision.
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(2)
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Pension scheme indemnity provision means provision indemnifying a director of a company that is a trustee of an occupational pension scheme against liability incurred in connection with the company’s activities as trustee of the scheme.
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Such provision is qualifying pension scheme indemnity provision if the following requirements are met.
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(3)
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The provision must not provide any indemnity against —
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(a)
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any liability of the director to pay —
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(i)
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a fine imposed in criminal proceedings, or
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(ii)
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a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or
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(b)
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any liability incurred by the director in defending criminal proceedings in which he is convicted.
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(4)
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The reference in subsection (3)(b) to a conviction is to the final decision in the proceedings.
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(a)
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a conviction becomes final —
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(i)
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if not appealed against, at the end of the period for bringing an appeal, or
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(ii)
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if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
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(b)
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an appeal is disposed of —
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(i)
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if it is determined and the period for bringing any further appeal has ended, or
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(ii)
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if it is abandoned or otherwise ceases to have effect.
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(6)
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In this section “occupational pension scheme” means an occupational pension scheme as defined in section 150(5) of the Finance Act 2004 (c 12) that is established under a trust.
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236. Qualifying indemnity provision to be disclosed in directors’ report
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(1)
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This section requires disclosure in the directors’ report of —
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(a)
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qualifying third party indemnity provision, and
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(b)
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qualifying pension scheme indemnity provision.
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Such provision is referred to in this section as “qualifying indemnity provision”.
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(2)
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If when a directors’ report is approved any qualifying indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company, the report must state that such provision is in force.
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(3)
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If at any time during the financial year to which a directors’ report relates any such provision was in force for the benefit of one or more persons who were then directors of the company, the report must state that such provision was in force.
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(4)
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If w
hen a directors’ report is approved qualifying indemnity provision made by the company is in force for the benefit of one or more directors of an associated company, the report must state that such provision is in force.
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(5)
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If at any time during the financial year to which a directors’ report relates any such provision was in force for the benefit of one or more persons who were then directors of an associated company, the report must state that such provision was in force”.
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Section 1157 of the Companies Act 2006 provides as follows:
“1157. Power of court to grant relief in certain cases:
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(1)
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If in proceedings for negligence, default, breach of duty or breach of trust against —
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(a)
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an officer of a company, or
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(b)
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a person employed by a company as auditor (whether he is or is not an officer of the company),
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it appears to the court hearing the case that the officer or person is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit.
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(2)
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If any such officer or person has reason to apprehend that a claim will or might be made against him in respect of negligence, default, breach of duty or breach of trust —
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(a)
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he may apply to the court for relief, and
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(b)
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the court has the same power to relieve him as it would have had if it had been a court before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.
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(3)
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Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant (in Scotland, the defender) ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case from the jury and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper”.
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Item 9. Undertakings
Each undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
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(i)
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To include any prospectus required by Section 10(a)(3) of the Securities Act;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registr
ation statement or any material change to such information in the registration statement;
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provided, however
, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is furnished on Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement;
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(2)
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That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof;
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(3)
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To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
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The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.