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EXHIBIT 10(n)
2914F
AMENDED AND RESTATED TRUST AGREEMENT No. 1
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This Amended and Restated Trust Agreement No. 1 ("Trust Agreement
No. 1") is made on this 9th day of March, 1992, by and between Cleveland-Cliffs
Inc, an Ohio corporation ("Cleveland-Cliffs"), and Ameritrust Company National
Association, a national banking association, as trustee (the "Trustee").
WITNESSETH:
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WHEREAS, Cleveland-Cliffs has entered into an agreement with each
of the executives (the "Executives") listed (from time to time as provided in
Section 9(c) hereof) on Exhibit A hereto (the agreements are referred to herein
singularly as an "Agreement" and collectively as the "Agreements");
WHEREAS, pursuant to the provisions of the Cleveland-Cliffs Inc
Supplemental Retirement Benefit Plan (as Amended and Restated Effective January
1, 1991), as the same has been or may hereafter be supplemented, amended or
restated, or any successor thereto (the "Plan"), the Executives and
beneficiaries of the Executives (also listed on Exhibit A hereto from time to
time as provided in Section 9(c) hereof), may become entitled to certain
benefits;
WHEREAS, (a) the Agreements provide for the payment of
certain current and deferred compensation and other benefits to the Executives
or their beneficiaries thereunder following a
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"Change of Control", as that term is defined in Exhibit B hereto, and (b) the
Plan provides for the payment of certain benefits to the Executives and
beneficiaries of Executives that (i) would be payable pursuant to the qualified
retirement plans established by Cleveland-Cliffs and its subsidiary
corporations and affiliates were it not for certain limitations imposed by the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) are or may
become due under certain agreements entered into (or which may be entered into)
by Cleveland-Cliffs and its subsidiary corporations and affiliates granting
additional service credit or other features for purposes of computing
retirement benefits, and (c) Cleveland-Cliffs wishes specifically to assure the
payment to the Executives and beneficiaries of Executives (Executives and
beneficiaries of Executives are referred to herein singularly as a "Trust
Beneficiary" and collectively as the "Trust Beneficiaries") of amounts due
under the Agreements and the Plan (collectively referred to herein as the
"Benefits");
WHEREAS, subject to Section 9 hereof, the amounts and timing of
Benefits to which each Trust Beneficiary is presently or may become entitled to
are as provided in and determined under the Agreements and the Plan;
WHEREAS, on October 28, 1987 Cleveland-Cliffs and the Trustee
entered into a trust agreement ("Trust Agreement No. 1") to provide for the
payment of certain benefits that may become payable to certain executives,
beneficiaries of such executives, and their beneficiaries under agreements then
in
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effect between Cleveland-Cliffs and the executives and under the Plan, as it
was in effect at such time;
WHEREAS, Trust Agreement No. 1 was amended by a First Amendment
to Trust Agreement dated November 6, 1987 and a Second Amendment to Trust
Agreement No. 1 dated April 9, 1991;
WHEREAS, Cleveland-Cliffs desires to amend and restate Trust
Agreement No. 1 heretofore entered into and has transferred or will transfer to
the trust (the "Trust") established by this Trust Agreement No. 1 assets which
shall be held therein subject to the claims of the creditors of
Cleveland-Cliffs to the extent set forth in Section 3 hereof until paid in full
to all Trust Beneficiaries as Benefits in such manner and at such times as
specified herein unless Cleveland-Cliffs is Insolvent (as defined herein) at
the time that such Benefits become payable; and
WHEREAS, Cleveland-Cliffs shall be considered "Insolvent" for
purposes of this Trust Agreement No. 1 at such time as Cleveland-Cliffs (i) is
subject to a pending voluntary or involuntary proceeding as a debtor under the
United States Bankruptcy Code, as heretofore or hereafter amended, or (ii) is
unable to pay its debts as they mature.
NOW, THEREFORE, the parties amend and restate Trust Agreement No.
1 and agree that the Trust shall be comprised, held and disposed of as follows:
1. TRUST FUND: (a) Subject to the claims of its
creditors to the extent set forth in Section 3 hereof, Cleveland-Cliffs (i)
hereby deposits with the Trustee in trust
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Ten Dollars ($10.00) which shall become the principal of this Trust, and (ii)
Cleveland-Cliffs may from time to time make additional deposits of cash or
other property in the Trust to augment such principal. The principal of the
Trust shall be held, administered and disposed of by the Trustee as herein
provided, but no payments of all or any portion of the principal of the Trust
or earnings thereon shall be made to Cleveland-Cliffs or any other person or
entity on behalf of Cleveland-Cliffs except as herein expressly provided.
(b) The Trust hereby established shall be revocable by
Cleveland-Cliffs at any time prior to the date on which occurs a Change of
Control, and on or after such date (the "Irrevocability Date"), this Trust
shall be irrevocable. In the event that the Irrevocability Date has occurred,
Cleveland-Cliffs shall so notify the Trustee promptly.
(c) The principal of the Trust and any earnings thereon shall
be held in trust separate and apart from other funds of Cleveland-Cliffs
exclusively for the uses and purposes herein set forth. No Trust Beneficiary
shall have any preferred claim on, or any beneficial ownership interest in, any
assets of the Trust prior to the time that such assets are paid to a Trust
Beneficiary as Benefits as provided herein.
(d) The Trust is intended to be a grantor trust, within the
meaning of section 671 of the Code, or any successor provision thereto, and
shall be construed accordingly. The Trust is not designed to qualify under
Section 401(a) of the Code or to be subject to the provisions of the Employee
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Retirement Income Security Act of 1974, as amended ("ERISA"). The Trust
established under this Trust Agreement No. 1 does not fund and is not intended
to fund the Agreements or the Plan or any other employee benefit plan or
program of Cleveland-Cliffs. Such Trust is and is intended to be a depository
arrangement with the Trustee for the setting aside of cash and other assets of
Cleveland-Cliffs for the meeting of part or all of its future obligations with
respect to Benefits.
2. PAYMENTS TO TRUST BENEFICIARIES. (a) Provided that
the Trustee has not actually received notice as provided in Section 3 hereof
that Cleveland-Cliffs is Insolvent and commencing with the earlier to occur of
(i) appropriate notice by Cleveland-Cliffs to the Trustee, or (ii) the
Irrevocability Date, the Trustee shall make payments of Benefits to each Trust
Beneficiary from the assets of the Trust in accordance with the terms of the
Agreement applicable to such Trust Beneficiary and of the Plan and subject to
Section 9 hereof. The Trustee shall make provision for withholding of any
federal, state, or local taxes that may be required to be withheld by the
Trustee in connection with the payment of any Benefits hereunder.
(b) If the balance of a separate account maintained for a
Trust Beneficiary pursuant to Section 7(b) hereof is not sufficient to provide
for full payment of benefits to which a Trust Beneficiary is entitled as
provided herein, then an amount up to the amount of such deficiency shall be
allocated to such separate account from the Master Account maintained pursuant
to section 7(b) hereof to the extent of the balance in the Master Account. If,
after application of the preceding
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sentence, the balance of a Trust Beneficiary's separate account maintained
pursuant to Section 7(b) is not sufficient to provide for full payment of
benefits to which a Trust Beneficiary is entitled as provided herein, then
Cleveland-Cliffs shall make the balance of each such payment as provided in the
applicable provision of the Agreement or the Plan, as the case may be. No
payment to a Trust Beneficiary from the assets of the Trust shall exceed the
balance of such separate account.
(c) Any payments of Benefits by the Trustee pursuant to this
Trust Agreement No. 1 shall, to the extent thereof, discharge the obligation of
Cleveland-Cliffs to pay such Benefits under the Agreements and the Plan, it
being the intent of Cleveland-Cliffs that assets in the Trust established
hereby be held as security for the obligation of Cleveland-Cliffs to pay
Benefits under the Agreements and the Plan.
3. THE TRUSTEE'S RESPONSIBILITY REGARDING PAYMENTS TO A TRUST
BENEFICIARY WHEN CLEVELAND-CLIFFS IS INSOLVENT: (a) At all times during the
continuance of this Trust, the principal and income of the Trust shall be
subject to claims of creditors of Cleveland-Cliffs as set forth in this Section
3(a). The Board of Directors of Cleveland-Cliffs ("the Board") and the Chief
Executive Officer of Cleveland-Cliffs ("the CEO") shall have the duty to inform
the Trustee if either the Board or the CEO believes that Cleveland-Cliffs is
Insolvent. If the Trustee receives a notice from the Board, the CEO, or a
creditor of Cleveland-Cliffs alleging that Cleveland-Cliffs is
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Insolvent, then unless the Trustee independently determines that
Cleveland-Cliffs is not Insolvent, the Trustee shall (i) discontinue payments
to any Trust Beneficiary, (ii) hold the Trust assets for the benefit of the
general creditors of Cleveland-Cliffs, and (iii) promptly seek the
determination of a court of competent jurisdiction regarding the Insolvency of
Cleveland-Cliffs. The Trustee shall deliver any undistributed principal and
income in the Trust to the extent of the balances of the accounts maintained
hereunder necessary to satisfy the claims of the creditors of Cleveland-Cliffs
as a court of competent jurisdiction may direct. Such payments of principal
and income shall be borne by the Master Account to the extent thereof, and then
by the separate accounts of the Trust Beneficiaries in proportion to the
balances on the date of such court order of their respective accounts
maintained pursuant to Section 7(b) hereof; provided, however, that (iv) all
Account Excesses shall first be determined and allocated in accordance with
Sections 4 and 7(b) hereof, and (v) for this purpose the Threshold Percentage
shall be equal to 100%. If payments to any Trust Beneficiary have been
discontinued pursuant to this Section 3(a), the Trustee shall resume payments
to such Trust Beneficiary only after receipt of an order of a court of
competent jurisdiction. The Trustee shall have no duty to inquire as to
whether Cleveland-Cliffs is Insolvent and may rely on information concerning
the Insolvency of Cleveland-Cliffs which has been furnished to the Trustee by
any person. Nothing in this Trust Agreement No. 1 shall in any way
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diminish any rights of any Trust Beneficiary to pursue his rights as a general
creditor of Cleveland-Cliffs with respect to Benefits or otherwise, and the
rights of each Trust Beneficiary shall in no way be affected or diminished by
any provision of this Trust Agreement No. 1 or action taken pursuant to this
Trust Agreement No. 1, except as provided in Section 2(c).
(b) If the Trustee discontinues payments of Benefits from the Trust
pursuant to Section 3(a) hereof, the Trustee shall, to the extent it has liquid
assets, place cash equal to the discontinued payments (to the extent not paid
to creditors pursuant to Section 3(a) and not paid to the Trustee pursuant to
Section 10 hereof) in such interest-bearing deposit accounts or certificates of
deposit (including any such accounts or certificate issued or offered by the
Trustee or any successor corporation but excluding obligations of
Cleveland-Cliffs) as determined by the Trustee in its sole discretion. If the
Trustee subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to the Trust Beneficiaries in accordance with this Trust
Agreement No. 1 during the period of such discontinuance, less the aggregate
amount of payments made to any Trust Beneficiary by Cleveland-Cliffs pursuant
to the Agreement applicable to such Trust Beneficiary and Plan during any such
period of discontinuance, together with interest on the net amount delayed
determined at a rate equal to the rate paid on the
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accounts or deposits selected by the Trustee; provided, however, that no such
payment shall exceed the balance of the respective Trust Beneficiary's account
as provided in Section 7(b) hereof.
4. PAYMENTS TO CLEVELAND-CLIFFS. Except to the extent
expressly contemplated by Section 1(b) and this Section 4, Cleveland-Cliffs
shall have no right or power to direct the Trustee to return any of the Trust
assets to Cleveland-Cliffs before all payments of Benefits have been made to
all Trust Beneficiaries as herein provided. From time to time, but in no event
before the third anniversary of the date on which occurs a Change of Control,
if and when requested by Cleveland-Cliffs to do so, the Trustee shall engage
the services of Xxxxxx Associates ("Xxxxxx") or such other independent actuary
as may be mutually satisfactory to Cleveland-Cliffs and to the Trustee to
determine the maximum actuarial present values of the future Benefits that
could become payable under the Plan and the Agreements with respect to the
Trust Beneficiaries. The Trustee shall determine the fair market values of the
Trust assets allocated to the account of each Trust Beneficiary and to the
Master Account pursuant to Section 7(b) hereof. Cleveland-Cliffs shall pay the
fees of such independent actuary and of any appraiser engaged by the Trustee to
value any property held in the Trust. The independent actuary shall make its
calculations based upon the assumption that each Executive will have base
salary and bonus increases from the date of calculation through the termination
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of his employment by Cleveland-Cliffs at the rate of the average increase in
such Executive's salary and bonus during the immediately preceding three years,
and that no Executive will leave the employ of Cleveland-Cliffs for any reason
other than (a) death prior to retirement or (b) retirement on or after age 62
or the corresponding date specified in the Agreement at the age that would
result in the maximum present value of Benefits payable to him or his Trust
Beneficiaries that is possible under the Plan and/or the Agreement. In
addition, the independent actuary shall use the 1983 Group Annuity Mortality
Table, an interest rate of 8%, Gross National Product Price Deflator increases
of 4%, or such other assumptions as are recommended by such actuary and
approved by Cleveland-Cliffs and, after the date of a Change of Control, a
majority of the Trust Beneficiaries (subject to the provisions of Sections
11(b)(i) and (b)(ii) hereof). For purposes of this Trust Agreement No. 1, the
"Fully Funded" amount with respect to the account of a Trust Beneficiary
maintained pursuant to Section 7(b) hereof shall be equal to the maximum
actuarial present value of the future Benefits that could become payable under
the Plan and the Agreements with respect to the Trust Beneficiary. The Trustee
shall then determine any allocations to and from the Master Account in
accordance with Section 7(b) hereof. Thereafter, upon the request of the
Company, the Trustee shall pay to Cleveland-Cliffs the excess, if any, of the
balance in the Master Account over 40% of the aggregate of all of the Fully
Funded amounts.
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5. INVESTMENT OF TRUST FUND. (a) The Trustee shall
invest and reinvest the principal of the Trust including any income accumulated
and added to principal, as directed by the Organization and Compensation
Committee of the Board of Directors of Cleveland-Cliffs (which direction may
not include investment in common shares of Cleveland-Cliffs). In the absence
of any such direction, the Trustee shall have sole power to invest the assets
of the Trust (excluding investment in common shares of Cleveland-Cliffs). The
Trustee shall act at all times, however, with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent corporate
trustee, acting in a like capacity and familiar with such matters, would use in
the conduct of an enterprise of a like character and with like aims. The
investment objective of the Trustee shall be to preserve the principal of the
Trust while obtaining a reasonable total rate of return, measurement of which
shall include market appreciation or depreciation plus receipt of interest and
dividends. The Trustee shall be mindful, in the course of its management of
the Trust, of the liquidity demands on the Trust and any actuarial assumptions
that may be communicated to it from time to time in accordance with the
provisions of this Trust Agreement No. 1.
(b) In addition to authority given to the Trustee under
Section 8 hereof, the Trustee is empowered with respect to the assets of the
Trust:
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(i) To invest and reinvest all or any part of the Trust
assets, in each and every kind of property, whether real, personal or mixed,
tangible or intangible, whether income or non-income producing, whether secured
or unsecured, and wherever situated, including, but not limited to, real
estate, shares of common and preferred stock, mortgages and bonds, leases (with
or without option to purchase), notes, debentures, equipment or collateral
trust certificates, and other corporate, individual or government securities or
obligations, time deposits (including savings deposit and certificates of
deposit in the Trustee or its affiliates if such deposits bear a reasonable
rate of interest), common or collective funds or trusts, and mutual funds or
investment companies, including affiliated investment companies and 12 B-1
funds. Cleveland-Cliffs acknowledges and agrees that the Trustee may receive
fees as a participating depository institution for services relating to the
investment of funds in an eligible mutual fund;
(ii) At such time or times, and upon such terms and conditions
as the Trustee shall deem advisable, to sell, convert, redeem, exchange, grant
options for the purchase or exchange of, or otherwise dispose of, any property
held hereunder, at public or private sale, for cash or upon credit, with or
without security, without obligation on the part of any person dealing with the
Trustee to see to the application of the proceeds of or to
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inquire into the validity, expediency, or propriety of any such disposal;
(iii) To manage, operate, repair, partition, and improve and
mortgage or lease (with or without an option to purchase) for any length of
time any property held in the Trust; to renew or extend any mortgage or lease,
upon such terms as the Trustee may deem expedient; to agree to reduction of the
rate of interest on any mortgage; to agree to any modification in the terms of
any lease or mortgage or of any guarantee pertaining to either of them; to
exercise and enforce any right of foreclosure; to bid on property in
foreclosure; to take a deed in lieu of foreclosure with or without paying
consideration therefor and in connection therewith to release the obligation on
the bond secured by the mortgage; and to exercise and enforce in any action,
suit, or proceeding at law or in equity any rights, covenants, conditions or
remedies with respect to any lease or mortgage or to any guarantee pertaining
to either of them or to waive any default in the performance thereof;
(iv) To join in or oppose any reorganization, recapitalization,
consolidation, merger or liquidation, or any plan therefor, or any lease (with
or without an option to purchase), mortgage or sale of the property of any
organization the securities of which are held in the Trust; to pay from the
Trust any assessments, charges or compensation specified in any plan of
reorganization,
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recapitalization, consolidation, merger or liquidation; to deposit any property
allotted to the Trust in any reorganization, recapitalization, consolidation,
merger or liquidation, to deposit any property with any committee or
depository; and to retain any property allotted. Trust in any reorganization,
recapitalization, consolidation, merger or liquidation;
(v) To compromise, settle, or arbitrate any claim, debt or
obligation of or against the Trust; to enforce or abstain from enforcing any
right, claim, debt, or obligation; and to abandon any property determined by it
to be worthless;
(vi) To make, execute and deliver, as Trustee, any deeds,
conveyances, leases (with or without option to purchase), mortgages, options,
contracts, waivers or other instruments that the Trustee shall deem necessary
or desirable in the exercise of its powers under this Agreement; and
(vii) To pay out of the assets of the Trust all taxes imposed or
levied with respect to the Trust and in its discretion may contest the validity
or amount of any tax, assessment, penalty, claim, or demand respecting the
Trust and may institute, maintain, or defend against any related action or
proceeding either at law or in equity (and in such regard, the Trustee shall be
indemnified in accordance with Section 8(d) hereof).
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6. INCOME OF THE TRUST. Except as provided in Section 3
hereof, during the continuance of this Trust all net income of the Trust shall
be allocated not less frequently than monthly among the Trust Beneficiaries'
separate accounts in accordance with Section 7(b) hereof.
7. ACCOUNTING BY TRUSTEE. (a) The Trustee shall keep
records in reasonable detail of all investments, receipts, disbursements and
all other transactions required to be done, including such specific records as
shall be agreed upon in writing by Cleveland-Cliffs and the Trustee. All such
accounts, books and records shall be open to inspection and audit at all
reasonable times by Cleveland-Cliffs, by any Trust Beneficiary, or in the event
of a Trust Beneficiary's death or adjudged incompetence, by an agent or
representative of any of the foregoing (as to such Trust Beneficiary's
account). Within 60 calendar days following the close of each calendar year
and within 60 calendar days after the removal or resignation of the Trustee,
the Trustee shall deliver to Cleveland-Cliffs and, following the Irrevocability
Date, to each Trust Beneficiary, or in the event of a Trust Beneficiary's death
or adjudged incompetence, any agent or representative of the Trust Beneficiary
(as to his or her account), a written account of its administration of the
Trust during such year or during the period from the end of the last preceding
year to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments
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purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities, rights and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
Such written accounts shall reflect the aggregate of the Trust accounts and
status of each separate account maintained for each Trust Beneficiary. Unless
Cleveland-Cliffs or any Trust Beneficiary shall have filed with the Trustee
written exception or objection to any such statement and account within 90 days
after receipt thereof, Cleveland-Cliffs and the Trust Beneficiary shall be
deemed to have approved such statement and account, and in such case, the
Trustee shall be forever released and discharged with respect to all matters
and things reported in such statement and account as though it had been settled
by a decree of a court of competent jurisdiction in an action or proceeding to
which Cleveland-Cliffs and the Trust Beneficiaries were parties.
(b)(i) The Trustee shall maintain a separate subaccount for each
Trust Beneficiary (a "Trust Beneficiary Account") and an account (the "Master
Account") that shall be kept separate from all Trust Beneficiary Accounts and
shall not be identified with any Trust Beneficiary. The Trustee shall credit
or debit each Trust Beneficiary Account and the Master Account as appropriate
to reflect the respective allocable portion of the Trust assets, as such Trust
assets may be adjusted from time to time pursuant to the terms of this Trust
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Agreement No. 1. Prior to the date of a Change of Control, all deposits of
principal pursuant to Section 1(a) shall be allocated and reallocated as
directed by Cleveland-Cliffs. On or after the date of a Change of Control
deposits of principal may be allocated, but not reallocated by
Cleveland-Cliffs. If any deposit of principal is not allocated by the Company,
such amount shall be allocated by the Trustee to the Master Account.
(ii) As further described in this Section 7(b)(ii), as of the
beginning of each calendar quarter ending after the Trust has become
irrevocable, the Trustee shall (A) ascertain (or cause to be determined) the
Fully Funded amounts (as defined in Section 4 hereof), (B) allocate the income
of the Trust, (C) determine the amount of all Account excesses (as hereinafter
defined), and (D) allocate amounts to and from the Master Account. The
"Account Excess" with respect to a Trust Beneficiary Account shall be equal to
the excess, if any, of the fair market value of the assets held in the Trust
allocated to a Trust Beneficiary Account over the respective Fully Funded
amount. The Trustee shall allocate the income of the Trust and all Account
Excesses to the Master Account. The balance in the Master Account shall then
be allocated to any Trust Beneficiary Accounts that are not Fully Funded in
proportion to the differences between the respective Fully Funded amount and
the balance of the Trust Beneficiary Account, insofar as possible, until all
Trust Beneficiary Accounts are Fully Funded.
(c) Nothing in this Section 7 shall preclude the commingling of
Trust assets for investment.
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8. RESPONSIBILITY OF TRUSTEE. (a) The Trustee shall act
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent corporate trustee, acting in a like capacity and
familiar with such matters, would use in the conduct of an enterprise of a like
character and with like aims; provided, however, that the Trustee shall incur
no liability to any person for any action taken pursuant to a direction,
request or approval, contemplated by and complying with the terms of this
Trust. Agreement No. 1, given in writing by Cleveland-Cliffs or by a Trust
Beneficiary applicable to his or her beneficial interest herein; and provided,
further, that the Trustee shall have no duty to seek additional deposits of
principal from Cleveland-Cliffs for additional amounts accrued under the
Agreement or the Plan, and the Trustee shall not be responsible for the
adequacy of this Trust.
(b) The Trustee may vote any stock or other securities and
exercise any right appurtenant to any stock, other securities or other property
held hereunder, either in person or by general or limited proxy, power of
attorney or other instrument.
(c) The Trustee may hold securities in bearer form and may
register securities and other property held in the trust fund in its own name
or in the name of a nominee, combine certificates representing securities with
certificates of the same issue held by the Trustee in other fiduciary
capacities, and deposit, or arrange for deposit of property with any
depository; provided that the books and records of the Trustee
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shall at all times show that all such securities are part of the trust fund
under this Trust Agreement No. 1.
(d) If the Trustee shall undertake or defend any litigation
arising in connection with this Trust Agreement No. 1, it shall be indemnified
by Cleveland-Cliffs against its costs, expenses and liabilities (including
without limitation attorneys' fees and expenses) relating thereto.
(e) The Trustee may consult with legal counsel, independent
accountants and actuaries (who may be counsel, independent accountants or
actuaries for Cleveland-Cliffs) with respect to any of its duties or
obligations hereunder, and shall be fully protected in acting or refrain from
acting in accordance with the advice of such counsel, independent accountants
and actuaries.
(f) The Trustee may rely and shall be protected in acting or
refraining from acting within the authority granted by the terms of this Trust
Agreement No. 1 upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties.
(g) The Trustee may hire agents, accountants, actuaries, and
financial consultants, who may be agents, accountants, actuaries, or financial
consultants, as the case may be, for Cleveland-Cliffs, and shall not be
answerable for the conduct of same if appointed with due care.
(h) The Trustee is empowered to take all actions necessary or
advisable in order to collect any benefits or payments of which the Trustee is
the designated beneficiary.
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(i) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law unless expressly provided otherwise
herein.
9. AMENDMENTS, ETC., TO AGREEMENTS AND PLAN; COOPERATION OF
CLEVELAND-CLIFFS.
(a) Cleveland-Cliffs has previously furnished the Trustee a
complete and correct copy of each Agreement and of the Plan, and
Cleveland-Cliffs shall, and any Trust Beneficiary may, promptly furnish the
Trustee true and correct copies of any amendment, restatement or successor
thereto, whereupon such amendment, restatement or successor shall be
incorporated herein by reference, provided that such amendment, restatement or
successor shall not affect the Trustee's duties and responsibilities hereunder
without the consent of the Trustee.
(b) Cleveland-Cliffs shall provide the Trustee with all
information requested by the Trustee for purposes of determining payments to
the Trust Beneficiaries or withholding of taxes as provided in Section 2. Upon
the failure of Cleveland-Cliffs or any Trust Beneficiary to provide any such
information, the Trustee shall, to the extent necessary in the sole judgment of
the Trustee, (i) compute the amount payable hereunder to any Trust Beneficiary;
and (ii) notify Cleveland-Cliffs and the Trust Beneficiary in writing of its
computations. Thereafter this Trust Agreement No. 1 shall be construed as to
the Trustee's duties and obligations hereunder in accordance with such Trustee
determinations without further action; provided, however, that no such
determinations shall in
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any way diminish the rights of any Trust Beneficiary hereunder or under any
Agreement or the Plan; and provided, further, that no such determinations shall
be deemed to modify this Trust Agreement No. 1, any Agreement or the Plan.
Nothing in this Trust Agreement No. 1 shall restrict Cleveland-Cliffs' right to
amend, modify or terminate the Plan.
(c) At such times as may in the judgment of Cleveland-Cliffs
be appropriate, Cleveland-Cliffs shall furnish to the Trustee any amendment to
Exhibit A for the purpose of the addition of Trust Beneficiaries to Exhibit A
(or the deletion of Trust Beneficiaries from Exhibit A who have no Benefits
currently due or payable in the future); provided, however, that no such
amendment shall be made after the date of a Change of Control.
10. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee
shall be entitled to receive such reasonable compensation for its services as
shall be agreed upon by Cleveland-Cliffs and the Trustee. The Trustee shall
also be entitled to reimbursement of its reasonable expenses incurred with
respect to the administration of the Trust including fees and expenses incurred
pursuant to Sections 8(d), 8(e) and 8(g) and liabilities to creditors pursuant
to court direction as provided in Section 3(a) hereof. Such compensation and
expenses shall in all events be payable either directly by Cleveland-Cliffs or,
in the event that Cleveland-Cliffs shall refuse, from the assets of the Trust
and charged pro rata in proportion to each separate account balance. The Trust
shall
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have a claim against Cleveland-Cliffs for any such compensation or expenses so
paid.
11. REPLACEMENT OF THE TRUSTEE. (a) Prior to the date of a
Change of Control, the Trustee may be removed by Cleveland-Cliffs. On or after
the date of a Change of Control, the Trustee may be removed at any time by
agreement of Cleveland-Cliffs and a majority of the Trust Beneficiaries. The
Trustee may resign after providing not less than 90 days' notice to
Cleveland-Cliffs and to the Trust Beneficiaries. In case of removal or
resignation, a new trustee, which shall be independent and not subject to
control of either Cleveland-Cliffs or the Trust Beneficiaries, shall be
appointed as shall be agreed by Cleveland-Cliffs and a majority of the Trust
Beneficiaries. No such removal or resignation shall become effective until the
acceptance of the Trust by a successor trustee designated in accordance with
this Section 11. If the Trustee should resign, and within 45 days of the
notice of such resignation, Cleveland-Cliffs and the Executives shall not have
notified the Trustee of an agreement as to a replacement trustee, the Trustee
shall appoint a successor trustee, which shall be a bank or trust company,
wherever located, having a capital and surplus of at least $500,000,000 in the
aggregate.
(b) For purposes of the removal or appointment of a Trustee
under this Section 11, (i) if any Trust Beneficiary shall be deceased or
adjudged incompetent, such Trust Beneficiary's personal representative
(including his or her
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guardian, executor or administrator) shall participate in such Trust
Beneficiary's stead, and (ii) a Trust Beneficiary shall not participate if all
payments of benefits then currently due or payable in the future have been made
to such Trust Beneficiary.
12. AMENDMENT OR TERMINATION. (a) This Trust Agreement
No. 1 may be amended by Cleveland-Cliffs and the Trustee without the consent of
any Trust Beneficiary provided the amendment does not adversely affect any
Trust Beneficiary. This Trust Agreement No. 1 may also be amended at any time
and to any extent by a written instrument executed by the Trustee,
Cleveland-Cliffs and the Trust Beneficiaries, except to alter Section 12(b),
and except that amendments to Exhibit A contemplated by Section 9(c) hereof
shall be made as therein provided.
(b) The Trust shall terminate on the date on which the Trust
no longer contains any assets, or, if earlier, the date on which each Trust
Beneficiary is entitled to no further payments hereunder.
(c) Upon termination of the Trust as provided in Section 12(b)
hereof, any assets remaining in the Trust shall be returned to Cleveland-Cliffs
or as it directs.
13. SPECIAL DISTRIBUTION. (a) It is intended that
(i) the creation of, and transfer of assets to, the Trust will not cause any
Agreement or the Plan to be other than "unfunded" for purposes of title I of
ERISA; (ii) transfers of assets to the Trust will not be transfers of property
for purposes of
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section 83 of the Code, or any successor provision thereto, nor will such
transfers cause a currently taxable benefit to be realized by a Trust
Beneficiary pursuant to the "economic benefit" doctrine; and (iii) pursuant to
section 451 of the Code, or any successor provision thereto, amounts will be
includable as compensation in the gross income of a Trust Beneficiary in the
taxable year or years in which such amounts are actually distributed or made
available to such Trust Beneficiary by the Trustee.
(b) Notwithstanding anything to the contrary contained in this
Trust Agreement No. 1, in the event it is determined by a final decision of the
Internal Revenue Service, or, if an appeal is taken therefrom, by a court of
competent jurisdiction that (i) by reason of the creation of, and a transfer of
assets to the Trust, the Trust is considered "funded" for purposes of title I
of ERISA; or (ii) a transfer of assets to the Trust is considered a transfer of
property for purposes of section 83 of the Code or any successor provision
thereto; or (iii) a transfer of assets to the Trust causes a Trust Beneficiary
to realize income pursuant to the "economic benefit" doctrine; or (iv) pursuant
to section 451 of the Code or any successor provision thereto, amounts are
includable as compensation in the gross income of a Trust Beneficiary in a
taxable year that is prior to the taxable year or years in which such amounts
would, but for this Section 13, otherwise actually be distributed or made
available to such Trust Beneficiary by the Trustee, then (A) the assets held in
Trust shall be allocated
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in accordance with Section 7(b) hereof, and (B) promptly after the next
quarterly allocation and reallocation pursuant to Section 7(b) hereof, the
Trustee shall distribute to each affected Trust Beneficiary an amount equal to
the lesser of (i) the amount which, after taking into account the federal,
state and local income tax consequences of the special distribution itself, is
equal to the sum of any federal, state and local income taxes, interest due
thereon, and penalties assessed with respect thereto, which are attributable to
amounts that are includable in the income of such Trust Beneficiary, or (ii)
the balance of the Trust Beneficiary Account corresponding to such amount.
14. SEVERABILITY, ALIENATION, ETC. (a) Any provision
of this Trust Agreement No. 1 prohibited by law shall be ineffective to the
extent of any such prohibition without invalidating the remaining provisions
hereof.
(b) To the extent permitted by law, Benefits to Trust
Beneficiaries under this Trust Agreement No. 1 may not be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process and no benefit provided for
herein and actually paid to any Trust Beneficiary by the Trustee shall be
subject to any claim for repayment by Cleveland-Cliffs or Trustee.
(c) This Trust Agreement No. 1 shall be governed by and
construed in accordance with the laws of the State of Ohio, without giving
effect to the principles of conflict of laws thereof.
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(d) This Trust Agreement No. 1 may be executed in two or more
counterparts, each of which shall be considered an original agreement. This
Trust Agreement No. 1 shall become effective immediately upon the execution by
Cleveland-Cliffs of at least one counterpart, it being understood that all
parties need not sign the same counterpart, but shall not bind any Trustee
until such Trustee has executed at least one counterpart.
15. NOTICES: IDENTIFICATION OF CERTAIN TRUST BENEFICIARIES.
(a) All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly given when received:
If to the Trustee, to:
Ameritrust Company National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Trust Department
Employee Benefit Administration
If to Cleveland-Cliffs, to:
Cleveland-Cliffs Inc
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
If to the Trust Beneficiaries, to the addresses listed on Exhibit A hereto
provided, however, that if any party or any Trust Beneficiary or his or its
successors shall have designated a different address by written notice to the
other parties, then to the last address so designated.
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(b) Cleveland-Cliffs shall provide the Trustee with the names
of any beneficiary or beneficiaries designated by the Executives (and who are,
therefore, Trust Beneficiaries hereunder).
IN WITNESS WHEREOF, Cleveland-Cliffs and the Trustee have caused
counterparts of this Amended and Restated Trust Agreement No. 1 to be executed
on their behalf on March 9, 1992, each of which shall be an original
agreement. ------------------
CLEVELAND-CLIFFS INC
By X. X. Xxxxx
-----------
Its Vice President
------------------
AMERITRUST COMPANY NATIONAL
ASSOCIATION
By J. R. Xxxxxxx
-------------
Its Vice President
--------------
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Exhibit A
---------
Executive Title Trust Beneficiary
--------- ----- -----------------
M. Xxxxxx Xxxxx Chairman and Chief M. T. Xxxxx Family
Executive Officer Trust
The M. Xxxxxx Xxxxx
Family Trust
Dated 11/29/85
Co-Trustees are: Xxxxxx Xxxxxxx
and Xxxxxxx X. Xxxxxxxx of the
Firm of Conway, Patton, Bouhall
and Xxxxxxxx
0000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx Senior Executive Society National Bank, or its
Vice President successor, as Trustee under the
Xxxxxxx X. Xxxxxx Revocable
Trust Agreement dated 5/9/89,
as the same may hereafter be
amended,
000 Xxxxxxxx Xxx.,
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx Executive Vice Xxxx Xxxxx Xxxxxxxx
President-Operations
Xxxx X. Xxxxxx Executive Vice Xxxxxxx X. Xxxxxx
President-Finance (wife)
3448F
29
Exhibit B
---------
"Change of Control" shall be deemed to have occurred if (i)
Cleveland-Cliffs 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
Cleveland-Cliffs as the same shall have existed immediately prior to such
merger or consolidation; (ii) Cleveland-Cliffs shall sell or transfer to one or
more persons, corporations or entities, in a single transaction or a series of
related transactions, more than one-half of the assets accounted for on the
Statement of Consolidated Financial Position of Cleveland-Cliffs as
"properties" or "investments in associated companies" (or such replacements for
these accounts as may be adopted from time to time) unless by an affirmative
vote of two-thirds of the members of the Board of Directors, the transaction or
transactions are exempted from the operation of this provision based on a good
faith finding that the transaction or transactions are not within the intended
scope of this definition for purposes of this instrument; (iii) a person,
within the meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on
the date hereof) 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 Exchange Act of 1934) of 30% or more of
the outstanding voting securities of Cleveland-Cliffs
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(whether directly or indirectly); or (iv) during any period of three
consecutive years, including, without limitation, the year 1991, individuals
who at the beginning of any such period constitute the Board of Directors of
Cleveland-Cliffs cease, for any reason, to constitute at least a majority
thereof, unless the election, or the nomination for election by the
shareholders of Cleveland-Cliffs, of each Director first elected during any
such period was approved by a vote of at least one-third of the Directors of
Cleveland-Cliffs who are Directors of Cleveland-Cliffs on the date of the
beginning of any such period.
