Exhibit 10(b)
CLEVELAND-CLIFFS INC
NONEMPLOYEE DIRECTORS' SUPPLEMENTAL COMPENSATION PLAN
WHEREAS, the Board of Directors of Cleveland-Cliffs Inc (the "Board of
Directors") has determined that the "Participants" (as defined in Section 2.1)
have, individually and collectively, made and may continue to make an essential
contribution to the profitability, growth, financial strength and overall
guidance of Cleveland-Cliffs Inc (the "Company") and
WHEREAS, the Company desires to provide an incentive to attract and
maintain the highest quality of individuals to serve as directors (the
"Directors");
NOW, THEREFORE, by approval of the Board of Directors of the Company,
the Company hereby establishes the CLEVELAND-CLIFFS INC NONEMPLOYEE DIRECTORS'
SUPPLEMENTAL COMPENSATION PLAN (the "Plan") to be effective as of July 1, 1995,
which Plan shall contain the following terms and conditions:
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 THE PLAN. The Company, intending that the Participants and
Directors shall rely thereon, hereby establishes the Plan.
1.2 AMENDMENT, SUSPENSION OR TERMINATION OF PLAN. The Company shall
not amend, suspend or terminate the Plan or any provision hereof, including
without limitation this Section 1.2, without the prior approval of a majority of
the Directors present at a meeting of the Board of Directors at which a "quorum"
(as defined in the Regulations of the Company) is present. Anything contained in
the Plan to the contrary notwithstanding, and notwithstanding any amendment,
suspension or termination (hereinafter collectively referred to in this Section
1.2 as an "Amendment") of the Plan, no right under the Plan of any person who
was a
Participant or a Director immediately prior to any Amendment shall in any
way be amended, modified, compromised, terminated or suspended without the prior
written consent of such person. Without such consent, the rights under the Plan
of a Participant and Director withholding such consent shall be as set forth in
the Plan in the form that the Plan existed on the date such person's rights
under the Plan vested, as set forth in Section 2.2 (as such Section 2.2 may be
amended by any Amendment consented to by such person).
ARTICLE II
PARTICIPANTS
2.1 PARTICIPANTS. Each Director who has never been an employee or
officer of the Company and who first serves as a Director on or after July 1,
1995 (an "Outside Director") shall become a Participant in the Plan upon the
completion of five years of continuous service as a Director.
2.2 VESTING. The rights under the Plan of all persons who are Directors
and who first serve as such on or after July 1, 1995 shall vest immediately upon
their election as Directors; PROVIDED, HOWEVER, that the right of any Director
to receive any benefits pursuant to Article III of the Plan shall be subject to
the qualification of such Director as a Participant hereunder and to such
Director's satisfaction of the requirements of Article III with respect to
benefit entitlement.
2.3 PARTICIPATION UPON CHANGE OF CONTROL. Anything contained herein to
the contrary notwithstanding, in the event of a "Change of Control" (as
hereinafter defined), each Outside Director shall become a Participant in the
Plan. A "Change of Control" shall mean the occurrence of any of the following
events:
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(a) The Company shall merge into itself, or be merged or consolidated
with, another corporation and as a result of such merger or consolidation less
than 70% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders of the
Company as the same shall have existed immediately prior to such merger or
consolidation;
(b) The Company shall sell or otherwise transfer all or substantially
all of its assets to any other corporation or other legal person, and
immediately after such sale or transfer less than 70% of the combined voting
power of the outstanding voting securities of such corporation or person is held
in the aggregate by the former shareholders of the Company as the same have
existed immediately prior to such sale or transfer;
(c) A person, within the meaning of Section 3(a)(9) or of Section
13(d)(3) (as in effect on July 1, 1995) of the Securities Exchange Act of 1934,
shall become the beneficial owner (as defined in Rule 13d-3 of the Securities
and Exchange Commission pursuant to the Securities and Exchange Act of 1934) of
30% or more of the outstanding voting securities of the Company (whether
directly or indirectly); or
(d) During any period of three consecutive years, individuals who at
the beginning of any such period constitute the Board of Directors of the
Company cease, for any reason, to constitute at least a majority thereof, unless
the election, or the nomination for election by the shareholders of the Company,
of each Director first elected during any such period was approved by a vote of
at least one-third of the Directors of the Company who are Directors of the
Company on the date of the beginning of any such period.
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ARTICLE III
POST-RETIREMENT INCOME
3.1 POST-RETIREMENT INCOME. Commencing upon a Participant's retire-
ment from the Board of Directors (i) with at least five years of continuous
service as a Director, or (ii) after a Change of Control (hereinafter
collectively referred to as the Participant's "Commencement Date"), the Company
will pay quarterly to the Participant an amount equal to Fifty Percent (50%) of
the stated quarterly Board of Directors retainer fee for service as an Outside
Director which is in effect on the Participant's retirement; PROVIDED, HOWEVER,
that such amount shall only be payable to a Participant during his "Payment
Period" (as defined in Section 3.2); PROVIDED FURTHER, that payment of such
amount shall not commence prior to the Participant's 65th birthday, except in
the case of disability of the Participant; and, PROVIDED FURTHER, that if a
Participant's Commencement Date is on account of an event described in clause
(ii) of this Section 3.1, such amount shall be reduced for any Participant with
fewer than five years of continuous service as an Outside Director by Twenty
Percent (20%) for each full year of continuous service less than five that such
Participant has served as an Outside Director. For purposes of this Section 3.1,
when determining the amount of an Outside Director's stated quarterly Board of
Directors retainer fee, such retainer fee shall be deemed to include the stock
component (if any, and whether restricted or unrestricted) of such fee. The
duration of post-retirement income payments described in this Section 3.1 shall
be as more fully described in Section 3.2. For purposes of this Section 3.1, the
term "retirement" of an Outside Director shall be deemed to include: (i) the
failure of the stockholders of the Company to re-elect such Outside Director;
PROVIDED, HOWEVER, that the right of any Director to receive benefits pursuant
to the provisions of this Article III shall be subject to the Director's
satisfaction of the applicable requirements of Article III with respect to
benefit entitlement, and (ii) following a Change of
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Control, resignation or the failure of the stockholders of the Company to
re-elect such Outside Director.
3.2 FORM OF PAYMENT. Post-retirement income payable pursuant to
Section 3.1 shall be paid to the Participant for a period equal to his years of
continuous service on the Board of Directors (the "Payment Period"). Such
post-retirement income shall be paid in cash to the Participant in equal
quarterly installments, each installment to be paid in advance on the first day
of each quarter, beginning with the quarter that begins on the first day of the
January, April, July or October coinciding with or next following such
Participant's Commencement Date. In the event a Participant who is married on
his Commencement Date dies during his Payment Period and prior to the
distribution of all post-retirement income to which he is entitled hereunder,
the remaining post-retirement income installment payments shall be paid to his
"Surviving Spouse" (as hereinafter defined) for the remainder of the Payment
Period or, if earlier, until the death of such Surviving Spouse. For purposes of
this Section 3.2, "Surviving Spouse" means the person to whom a Participant is
legally married on his Commencement Date. In the event a Participant who is not
married on his Commencement Date dies during his Payment Period and prior to the
distribution of all post-retirement income to which he is entitled hereunder,
the last payment made hereunder shall be the payment made to the Participant for
the quarter during which his death occurs.
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ARTICLE IV
GENERAL PROVISIONS
4.1 SUCCESSORS AND BINDING AGREEMENTS.
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(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Company expressly
to assume and agree to perform hereunder the Plan in the same manner and to the
same extent the Company would be required to perform if no such succession had
taken place. The Plan shall be binding upon and inure to the benefit of the
Company and any successor of or to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by sale, merger, consolidation,
reorganization or otherwise (and such successor shall thereafter be deemed to be
the "Company" for purposes of this Plan), but shall not otherwise be assignable
or delegatable by the Company.
(b) The Plan shall inure to the benefit of and be enforceable by each
of the Participants or Directors and his respective personal or legal
representatives, executors, administrators, successors, heirs, distributees
and/or legatees.
(c) Neither the Company nor any Participant or Director hereunder
shall assign, transfer or delegate the Plan or any rights or obligations
hereunder, except as expressly provided in Section 4.1(a). Without limiting the
generality of the foregoing, no right or interest under the Plan of a
Participant or Director (or of any person claiming under or through any of them)
shall be assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner
be liable for or subject to the debts or liabilities of any such Participant or
Director or designated beneficiary. If any Participant or Director or designated
beneficiary shall attempt to or shall transfer, assign,
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alienate, anticipate, sell, pledge or otherwise encumber his benefits hereunder
or any part thereof, or if by reason of his bankruptcy or other event occurring
at any time such benefits would devolve upon anyone else or would not be enjoyed
by him, then the Company, acting through the Board Affairs Committee of the
Board of Directors, in its discretion, may terminate his interest in any such
benefit to the extent the Company considers it necessary or advisable in order
to prevent or limit the effects of such occurrence. Such termination shall be
affected by filing a written "termination declaration" with the Plan's records
and by making reasonable efforts to deliver a copy of such "termination
declaration" to the Participant or Director or designated beneficiary (the
"Terminated Participant") whose interest is adversely affected.
As long as the Terminated Participant is alive, any benefits affected
by the termination shall be retained by the Company and, in the Company's sole
and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his spouse, his children or any other person or persons
in fact dependent upon him in such a manner as the Company shall deem proper.
Upon the death of the Terminated Participant, all benefits withheld from him and
not paid to others in accordance with the preceding sentence shall be paid to
the Terminated Participant's then living descendants, including adopted
children, per stirpes, or, if there are none then living, to his estate.
4.2 NOTICES. For all purposes of this Plan, all communications provided
for herein shall be in writing and shall be deemed to have been duly given when
delivered on five business days after having been mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to a Participant at his principal residence,
or to such other address as any party may have furnished to the other in writing
and
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in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
4.3 FORFEITURE OF POST-RETIREMENT INCOME. No post-retirement income
shall be paid to any Participant or Surviving Spouse hereunder unless the
Participant agrees (i) to be available to the Company in an unpaid advisory
capacity on and after his Commencement Date, and (ii) not to engage in any
activity adverse to the interests of the Company. In the event the Participant
breaches such agreement, no further payments to the Participant or his Surviving
Spouse shall be made hereunder. Anything contained herein to the contrary
notwithstanding, the provisions of this Section 4.3 shall not apply in the event
of a Change of Control.
4.4 GOVERNING LAW. The validity, interpretation, construction and
performance of this Plan shall be governed by the laws of the State of Ohio,
without giving effect to the principles of conflict of laws of such State.
4.5 SEVERABILITY. Each Section, subsection and lesser section of the
Plan constitutes a separate and distinct undertaking, covenant and/or provision
hereof. Whenever possible, each provision of the Plan shall be interpreted in
such manner as to be effective and valid under applicable law. In the event that
any provision of the Plan shall finally be determined to be unlawful, such
provision shall be deemed severed from the Plan, but every other provision of
the Plan shall remain in full force and effect, and in substitution for any such
provision held unlawful, there shall be substituted a provision of similar
import reflecting the original intention of the parties hereto to the extent
permissible under law.
4.6 WITHHOLDING OF TAXES. The Company may withhold from any amounts
payable under the Plan all federal, state, city and other taxes as shall be
legally required.
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4.7 GENDER AND NUMBER. As used in the Plan, the singular shall include
the plural and the masculine shall include the feminine, and vice versa, all as
required by the context.
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IN WITNESS WHEREOF, this Plan has been duly adopted by the Company as
of July 1, 1995.
CLEVELAND-CLIFFS INC
By /s/ M. T. Moore
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Chairman and Chief Executive Officer