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Exhibit 10(a)
AMENDED AND RESTATED CLEVELAND-CLIFFS INC
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
THIS RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS ("Plan") was
established effective June 1, 1984 by The Cleveland-Cliffs Iron Company ("Cliffs
Iron") and adopted and assumed by Cleveland-Cliffs Inc, an Ohio corporation
("Cleveland-Cliffs" or the "Company"), effective September 1, 1985, amended and
restated effective January 1, 1988, amended by First Amendment, dated July 1,
1995, and is amended and restated effective July 1, 1995 to read as follows:
RECITALS
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A. The Board of Directors of the Company (the "Board of
Directors") has determined that the Participants (as hereinafter defined) have,
individually and collectively, made and may continue to make an essential
contribution to the profitability, growth, financial strength and overall
guidance of the Company.
B. The Company wishes to provide an incentive to attract and
maintain the highest quality of individuals to serve as directors (the
"Directors") of the Company.
SECTION 1. ESTABLISHMENT OF THE PLAN
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1.1 THE PLAN. The Company, intending that the Participants
and Directors shall rely thereon, hereby establishes this Plan.
1.2 AMENDMENTS, ETC. The Company shall not amend, suspend or
terminate this 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
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Regulations of the Company) is present. Anything in the Plan to the contrary
notwithstanding, and notwithstanding any amendment, suspension or termination
(hereinafter in this Section 1.2 collectively referred to 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 amended by any Amendment consented to by
such person).
SECTION 2. PARTICIPANTS
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2.1 PARTICIPANTS. Each Director who has never been an employee
or officer of the Company or Cliffs Iron and who first serves as a Director
before 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. For
the purposes of determining such five-year period of service, service as a
director of Cliffs Iron prior to September 1, 1985 shall be aggregated with
service as an Outside Director.
2.2 VESTING. The rights under the Plan of all persons who are
Directors as of the date of adoption of the Plan shall vest simultaneously with
the adoption of the Plan by the Company, and the rights under the Plan of all
persons who become Directors subsequent to the adoption of the Plan shall vest
immediately upon their election as Directors; PROVIDED, HOWEVER, that the right
of any Director to receive any benefits pursuant to Section 3 of the Plan shall
be subject to the qualification of such Director as a Participant hereunder and
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to the Director's satisfaction of the requirements of Section 3 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:
(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 shall
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
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(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.
SECTION 3. POST-RETIREMENT INCOME
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3.1 POST-RETIREMENT INCOME. Commencing upon a Participant's
retirement from the Board of Directors (i) after attaining the normal retirement
age for Directors, as established from time to time by the Board of Directors,
with at least five years of continuous service as a Director, (ii) because of
disability or health reasons, (iii) with the consent of the Board of Directors,
or (iv) 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 the greatest of (v) One Hundred Percent (100%) of
the stated quarterly Board of Directors retainer fee for service as an Outside
Director which is in effect on the Participant's Commencement Date, (vi) One
Hundred Percent (100%) of the stated quarterly Board of Directors retainer fee
for service as an Outside Director which is in effect on the day immediately
preceding a Change of Control, or (vii) One Hundred Percent (100%) of the stated
quarterly Board of Directors retainer fee which is in effect from time to time;
PROVIDED, HOWEVER, that if a Participant's Commencement Date is on account of an
event described in clause (iv) 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
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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 include, following a Change of 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 in cash for such Participant's
life 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.
(a) Anything contained herein to the contrary notwithstanding,
and subject to the provisions of subsection (c) of this Section 3.2, in the
event a Participant is married on his Commencement Date, such Participant may
elect to have his post-retirement income paid in the form of a "Joint and
Survivor Benefit" (as hereinafter defined). For purposes of this Section 3.2, a
"Joint and Survivor Benefit" is a reduced post-retirement income that is payable
to the Participant in equal quarterly installments for his life with the
provision that, in the event the Participant should predecease his "Surviving
Spouse" (as defined in subsection (b) of this Section 3.2), One Hundred Percent
(100%) of such reduced post-retirement income shall be paid to his Surviving
Spouse in equal quarterly installments for the duration of her life. Quarterly
installments of the Joint and Survivor Benefit will be paid as more particularly
set forth in the
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first paragraph of this Section 3.2. The post-retirement income payable to a
Participant pursuant to the provisions of this subsection (a) shall be the
"Actuarial Equivalent" (as defined in subsection (b) of this Section 3.2) of the
post-retirement income described in the first paragraph of this Section 3.2.
(b) For purposes of this Section 3.2, the following terms
shall have the following meanings. A Participant's "Surviving Spouse" is the
person to whom the Participant is legally married on his Commencement Date.
"Actuarial Equivalent" means a payment or series of payments having the same
present value as the normal form of benefit distribution described in the first
paragraph of this Section 3.2, and calculated based on (i) the mortality table
in effect as of the date benefit distribution commences, which mortality table
shall be the table prescribed by the Secretary of the Treasury and required for
pension plan compliance under the provisions of Section 417(e) of the Internal
Revenue Code of 1986, as amended, and regulations promulgated thereunder, and
(ii) interest equal to the average annual rate of interest on 30-year Treasury
securities for the month prior to the month benefit distribution commences.
(c) Any married Participant may elect to have his
post-retirement income paid in the form of a Joint and Survivor Benefit, as more
particularly set forth in subsection (a) above, by written notice filed with the
Board Affairs Committee of the Board of Directors (the "Committee") at least one
year prior to the Participant's Commencement Date. Any such election may be
changed by the Participant at any time and for any number of times prior to the
Participant's Commencement Date and without the consent of any other person by
the Participant filing a later signed written election with the Committee;
PROVIDED, HOWEVER, that any election made less than one year prior to the
Participant's Commencement Date shall not be valid. A Participant's election of
the Joint and Survivor Benefit pursuant to the provisions of this subsection (c)
shall become
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irrevocable when the Participant commences receipt of benefits hereunder.
Notwithstanding the foregoing proviso, any election made during the Thirty (30)
day period which commences September 1, 1996 shall be a valid election for
purposes of this subsection (c).
SECTION 4. GENERAL PROVISIONS
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4.1 SUCCESSORS AND BINDING AGREEMENTS. (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 to agree to
perform this Plan in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This 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 the "Company" for the purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the Company.
(b) This 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 this 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 this Plan
of a Participant or Director (or any person claiming through or under any of
them)
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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, alienate, anticipate,
sell, pledge or otherwise encumber his benefits hereunder or any part thereof,
or if by reason of his bankruptcy or other event happening 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 necessary or advisable to prevent or limit the effects of
such occurrence. Termination shall be affected by filing a written "termination
declaration" with the Plan's records and making reasonable efforts to deliver a
copy 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 or five business days after having been mailed by United
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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 in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
4.3 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.
4.4 SEVERABILITY. Each section, subsection and lesser section
of this Plan constitutes a separate and distinct undertaking, covenant and/or
provision hereof. Whenever possible, each provision of this Plan shall be
interpreted in such manner as to be effective and valid under applicable law. In
the event that any provision of this Plan shall finally be determined to be
unlawful, such provision shall be deemed severed from this Plan, but every other
provision of this 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.
4.5 WITHHOLDING OF TAXES. The Company may withhold from any
amounts payable under this Plan all federal, state, city and other taxes as
shall be legally required.
4.6 GENDER, NUMBER, ETC. As used in this Plan, the singular
shall include the plural and the masculine shall include the feminine, and vice
versa.
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IN WITNESS WHEREOF, this Amended and Restated 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
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