Exhibit 10(q)
AMENDED AND RESTATED TRUST AGREEMENT NO. 2
This Amended and Restated Trust Agreement No. 2 ("Trust Agreement
No. 2") is made on this 15th day of October, 2002, by and between
Cleveland-Cliffs Inc, an Ohio corporation ("Cleveland-Cliffs"), and KeyBank
National Association, a national banking association, as trustee (the
"Trustee").
WITNESSETH:
WHEREAS, Cleveland-Cliffs and Ameritrust Company National
Association, a predecessor of the Trustee, entered into a trust agreement
("Original Trust Agreement No. 2"), dated October 28, 1987, to provide for the
payment of reasonable attorneys' and related fees and expenses incurred by
certain executives in the enforcement of their rights under agreements between
such executives and Cleveland-Cliffs in effect at that time; and
WHEREAS, the Original Trust Agreement No. 2 was amended and restated
by an instrument dated March 24, 1992 and was further amended and restated,
effective June 1, 1997 ("Amended and Restated Trust Agreement No. 2"); and
WHEREAS, the Amended and Restated Trust Agreement No. 2 was amended
by the First Amendment to Amended and Restated Trust Agreement No. 2, effective
July 1, 1997; and
WHEREAS, the Amended and Restated Trust Agreement No. 2 was further
amended by the Trust Agreement No. 2 Amendments to Exhibits, effective January
1, 2000; and
WHEREAS, Cleveland-Cliffs and the Trustee entered into a trust
agreement ("Original Trust Agreement No. 6"), dated January 22, 1988, to provide
for payment of expenses
associated with the enforcement of certain indemnitee's rights under
indemnification agreements; and
WHEREAS, the Original Trust Agreement No. 6 was amended by a First
Amendment to Trust Agreement No. 6, dated April 9, 1991; and
WHEREAS, the Original Trust Agreement No. 6 was further amended and
restated by an Amended and Restated Trust Agreement No. 6 ("Amended and Restated
Trust Agreement No. 6"), effective March 9, 1992; and
WHEREAS, the Amended and Restated Trust Agreement No. 6 was amended
by the First Amendment to the Amended and Restated Trust Agreement No. 6,
effective July 1, 1997; and
WHEREAS, under the provisions of certain severance agreements
between each of the executives of Cleveland-Cliffs ("Executives") listed (from
time to time as provided in Section 9(c) hereof) on Exhibit A hereto and
Cleveland-Cliffs ("Executive Agreements"), as each of the same may hereafter be
amended or restated, or any successor thereto, the Executives may become
entitled to certain compensation, pension and other benefits; and
WHEREAS, under the provisions of the Cleveland-Cliffs Inc Change in
Control Severance Pay Plan ("Severance Plan"), effective January 1, 2000, as the
same may be supplemented, amended, or restated, or any successor thereto,
certain key employees ("Key Employees") also listed (from time to time as
provided in Section 9(c) hereof) on Exhibit A hereto, may become entitled to
compensation, pension and other benefits; and
WHEREAS, under the provisions of the Cleveland-Cliffs Inc Retention
Plan for Salaried Employees ("Retention Plan"), adopted February 1, 1997, as the
same may be
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supplemented, amended, or restated, or any successor thereto, certain salaried
employees identified therein may become entitled to compensation and other
benefits; and
WHEREAS, Cleveland-Cliffs has entered into and may from time to time
enter into separate indemnification agreements (substantially in the form
attached hereto as Exhibits B and C) with its directors and certain officers of
Cleveland-Cliffs ("Directors/Officers") (as listed on Exhibit D hereto) (each
such indemnification agreement being hereinafter referred to as an
"Indemnification Agreement"); and
WHEREAS, in addition to the compensation, pension and other benefits
provided by the Executive Agreements, the Severance Plan, the Retention Plan and
the Indemnification Agreements, in order to ensure that the obligations of
Cleveland-Cliffs under the Executive Agreements, the Severance Plan, the
Retention Plan and the Indemnification Agreements can be enforced by the
Executives, the Key Employees, the employees covered by the Retention Plan and
the Directors/Officers, respectively, (referred to herein singularly as an
"Indemnitee" and collectively as "Indemnitees") in the event of a "Change of
Control" (as defined herein) (i) the Executive Agreements, the Severance Plan
and the Retention Plan all provide that Cleveland-Cliffs will establish a trust
to fund reasonable attorneys' and related fees and expenses associated with a
lawsuit, action or other proceeding brought by or on behalf of an Indemnitee to
enforce certain provisions of such Indemnitee's Executive Agreement, the
Severance Plan and the Retention Plan and (ii) each Indemnification Agreement
provides, among other things, for Cleveland-Cliffs to pay and be solely
responsible for the expenses associated with the enforcement of the Indemnitee's
rights under the Indemnitee's Indemnification Agreement, including without
limitation fees and expenses of attorneys and others (all such fees and expenses
associated with enforcing the provisions of the Executive Agreements, the
Severance
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Plan, the Retention Plan and the Indemnification Agreements are referred to
collectively herein as "Expenses"); and the foregoing trust arrangement will be
considered a part of the Executive Agreements, the Severance Plan and the
Retention Plan, and will set forth the terms and conditions relating to the
payment of Expenses; and
WHEREAS, Cleveland-Cliffs desires to terminate Amended and Restated
Trust Agreement No. 6, amend and restate the Amended and Restated Trust
Agreement No. 2 as this Trust Agreement No. 2 heretofore entered into and has
transferred or will transfer to the trust ("Trust") established by this Trust
Agreement No. 2 assets from Amended and Restated Trust Agreement No. 6 which
along with assets held in this Trust Agreement No. 2 shall be held therein until
paid to Indemnitees with respect to Expenses in such manner and at such times as
specified herein.
NOW, THEREFORE, effective October 15, 2002 ("Effective Date"), the
parties hereby terminate Trust Agreement No. 6 and amend and restate the Amended
and Restated Trust Agreement No. 2 as this Trust Agreement No. 2 and agree that
the Trust shall be comprised, held and disposed of as follows:
1. Trust Fund. (a) At the Effective Date, the principal amount of
the Trust shall be Five Hundred Fifty-eight Thousand Nine Dollars and
Twenty-nine cents ($558,009.29), to be held, administered and disposed of by the
Trustee as herein 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," as that term is defined in this Section l(b); on or after such date,
this Trust shall be irrevocable. Cleveland-Cliffs shall notify the Trustee
promptly in the event that a Change of Control has occurred. The term "Change of
Control" shall mean the occurrence of any of the following events:
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(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended ("Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
30% or more of the combined voting power of the then outstanding
securities of Cleveland-Cliffs entitled to vote generally in the election
of directors ("Voting Stock"); provided, however, that for purposes of
this Section 1(b)(i), the following acquisitions shall not constitute a
Change of Control: (A) any issuance of Voting Stock of Cleveland-Cliffs
directly from Cleveland-Cliffs that is approved by the Incumbent Board (as
defined in Section 1(b)(ii), below) of the Board of Directors of
Cleveland-Cliffs ("Board"), (B) any acquisition by Cleveland-Cliffs of
Voting Stock of Cleveland-Cliffs, (C) any acquisition of Voting Stock of
Cleveland-Cliffs by any employee benefit plan (or related trust) sponsored
or maintained by Cleveland-Cliffs or any Subsidiary, or (D) any
acquisition of Voting Stock of Cleveland-Cliffs by any Person pursuant to
a Business Combination that complies with clauses (A), (B) and (C) of
Section 1(b)(iii), below; or
(ii) individuals who, as of the date hereof, constitute the
Board ("Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
member of the Board (a "Director") subsequent to the date hereof whose
election, or nomination for election by Cleveland-Cliffs's shareholders,
was approved by a vote of at least a majority of the Directors then
comprising the Incumbent Board (either by a specific vote or by approval
of the proxy statement of Cleveland-Cliffs in which such person is named
as a nominee for director, without objection to such nomination) shall be
deemed to have been a
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member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11
of the Exchange Act) with respect to the election or removal of Directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) consummation of a reorganization, merger or
consolidation involving Cleveland-Cliffs, a sale or other disposition of
all or substantially all of the assets of Cleveland-Cliffs, or any other
transaction involving Cleveland-Cliffs (each, a "Business Combination"),
unless, in each case, immediately following such Business Combination, (A)
all or substantially all of the individuals and entities who were the
beneficial owners of Voting Stock of Cleveland-Cliffs immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 55% of the combined voting power of the then outstanding shares of
Voting Stock of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns Cleveland-Cliffs or all or substantially all of
Cleveland-Cliffs's assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to each other
as their ownership, immediately prior to such Business Combination, of the
Voting Stock of Cleveland-Cliffs, (B) no Person (other than
Cleveland-Cliffs, such entity resulting from such Business Combination, or
any employee benefit plan (or related trust) sponsored or maintained by
Cleveland-Cliffs, any Subsidiary or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 30% or
more of the combined voting power of the then outstanding shares of Voting
Stock of the entity resulting from
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such Business Combination, and (C) at least a majority of the members of
the Board of Directors of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing
for such Business Combination; or
(iv) approval by the shareholders of Cleveland-Cliffs of a
complete liquidation or dissolution of Cleveland-Cliffs, except pursuant
to a Business Combination that complies with clauses (A), (B) and (C) of
Section 1(b)(iii).
(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 Indemnitee 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 an Indemnitee as
Expenses as provided herein.
(d) Any Company (as defined in paragraph (e) below) may at any time
or from time to time make additional deposits of cash or other property in the
Trust to augment the principal to 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.
(e) The term "Company" as used herein shall mean Cleveland-Cliffs,
any wholly owned subsidiary or any partnership or joint venture in which
Cleveland-Cliffs and/or any wholly-owned subsidiary is a partner or venturer,
and Empire Iron Mining Partnership, or any entity that is a successor to
Cleveland-Cliffs in ownership of substantially all of its assets.
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(f) This Trust Agreement No. 2 shall be construed as a part of the
Executive Agreements, the Severance Plan and the Retention Plan.
(g) This Trust is intended to be a grantor trust, within the meaning
of Section 671 of the Internal Revenue Code of 1986, as amended ("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 Retirement Income Security Act of 1974, as amended
("ERISA").
2. Payments to Indemnitees. (a) The Trustee shall promptly pay
Expenses to the Indemnitees from the assets of the Trust in accordance with
Section 7 of the Executive Agreements, Section 11 of the Severance Plan, Article
IX of the Retention Plan, Sections 2, 3, 4 and 7 of each Indemnification
Agreement and this Section 2, provided that (i) this Trust Agreement No. 2 has
not been terminated pursuant to Section 12 hereof; (ii) the Trust has become
irrevocable; (iii) with respect to the first demand for payment of Expenses
hereunder received by the Trustee, the Trustee shall immediately give
appropriate notice thereof to all Indemnitees, and shall make no payment of
Expenses until the 21st day after such notice has been given; and (iv) the
requirements of Section 2(c) and 2(d) hereof have been satisfied. The Trustee
shall promptly inform the Company as to amounts paid to any Indemnitee pursuant
to this Section.
(b) It is the intention of Cleveland-Cliffs that during the 21-day
period prescribed by Section 2(a)(iii) hereof, the Indemnitees will make
reasonable efforts to consult with each other and to take into account the
interests of all Indemnitees in deciding on how best to proceed to enforce the
provisions of the Executive Agreements, the Severance Plan, the Retention Plan,
and/or the Indemnification Agreements such that the assets of the Trust are
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utilized most effectively; provided, however, that this Section 2(b) is to be
construed as precatory in nature, and in the absence of any other agreement or
arrangement, this Trust Agreement No. 2 (without regard to this Section 2(b))
shall apply to the payment of Expenses.
(c) A demand for payment by an Indemnitee hereunder must be made
within two months of the date on which the Indemnitee receives a xxxx, invoice
or other statement setting forth the Expenses that have been incurred, and with
respect to the Indemnification Agreements, prior to the sixth anniversary after
termination of such Indemnitee's services with Cleveland-Cliffs. In order to
demand payment hereunder, the Indemnitee must deliver to the Trustee (i) a
certificate signed by or on behalf of such Indemnitee, certifying to the Trustee
that the Company is in default in paying the Indemnitee a specified amount which
the Indemnitee states to be owed under an Executive Agreement, the Severance
Plan, the Retention Plan or an Indemnification Agreement, and (ii) a notice in
writing and in reasonable detail of the Expenses that are to be paid hereunder.
(d) To the extent payments hereunder may be made only from funds
held in the form of a deposit or obligation, such payments may be postponed
until such deposit or obligation shall have matured. Payments shall be made to
the Indemnitee in the full amount noticed until the Trust is depleted; provided
that if on the date such amount is to be paid from the Trust other amounts have
been claimed but not yet paid to the same or other Indemnitees and the aggregate
amount so claimed exceeds the amount available in the Trust, the Trustee shall
only pay that portion of the amount then available to each such Indemnitee
determined by multiplying such amount by a fraction, the numerator of which is
the amount then in the Trust and the denominator of which is the aggregate
amount noticed by the Indemnitees to be owed but not yet paid to that date.
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3. Rights of Indemnitees. (a) Nothing in this Trust Agreement No. 2
shall in any way diminish any rights of any Indemnitee to pursue his rights as a
general creditor of the Company with respect to Expenses or otherwise, and (b)
the rights of the Indemnitees under the Executive Agreements, Severance Plan,
Retention Plan or Indemnification Agreements shall in no way be affected or
diminished by any provision of this Trust Agreement No. 2 or action taken
pursuant to this Trust Agreement No. 2, it being the intent of Cleveland-Cliffs
that rights of the Indemnitees be security for obligations of the Company under
the Executive Agreements, Severance Plan, Retention Plan or Indemnification
Agreements, except that any payment actually received by any Indemnitee
hereunder shall reduce dollar-per-dollar amounts otherwise due to such
Indemnitee pursuant to Section 7 of the Executive Agreements, Section 11 of the
Severance Plan, Article IX of the Retention Plan or Sections 2, 3, 4 and 7 of
the Indemnification Agreements, as applicable.
4. Payments to Cleveland-Cliffs. Except to the extent expressly
contemplated by Section l(b), 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 Expenses have been made to all Indemnitees as herein provided.
5. Investment of Trust Fund. The Trustee shall invest the principal
of the Trust including any income accumulated and added to principal in (a)
interest-bearing deposit accounts or certificates of deposit (including any such
accounts or certificates issued or offered by the Trustee or any successor or
affiliated corporation but excluding obligations of the Company), (b) direct
obligations of the United States of America, or obligations the payment of which
is guaranteed, as to both principal and interest, by the government or an agency
of the government of the United States of America, or (c) one or more mutual
funds or commingled
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funds, whether or not maintained by the Trustee, substantially all of the assets
of which is invested in obligations the income from which is not subject to
taxation; provided, however, that no such investment may mature more than 90
days after the date of purchase. Nothing in this Trust Agreement No. 2 shall
preclude the commingling of Trust assets for investment.
6. Income of the Trust. During the continuance of this Trust all net
income of the Trust shall be retained in the Trust and added to the principal of
the Trust.
7. Accounting by Trustee. 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 Indemnitee or by any agent or representative of any
of the foregoing. Within 60 calendar days following the end 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, if such year end,
removal or resignation occurs on or after the date on which a Change of Control
has occurred, to each Executive, Key Employee and Director/Officer 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 affected by it, including a description of all securities and
investments 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. The Trustee shall furnish to Cleveland-Cliffs on a quarterly basis
(or as Cleveland-Cliffs shall direct from time to time) and
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in a timely manner such information regarding the Trust as Cleveland-Cliffs
shall require for purposes of preparing its statements of financial condition.
Unless Cleveland-Cliffs or any Executive, Key Employee and Director/Officer
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 Indemnitees 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 Indemnitees were parties.
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 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 which
is contemplated by and in conformity and compliance with the terms of this Trust
Agreement No. 2, the Executive Agreements, the Severance Plan, the Retention
Plan and the Indemnification Agreements, and is given in writing by
Cleveland-Cliffs or by an Indemnitee with respect to his beneficial interest
herein; and provided, further, that the Trustee shall have no duty to seek
additional deposits of principal from Cleveland-Cliffs, and the Trustee shall
not be responsible for the adequacy of this Trust.
(b) The Trustee shall not be required to undertake or to defend any
litigation arising in connection with this Trust Agreement No. 2 unless it be
first indemnified by Cleveland-Cliffs against its prospective costs, expenses,
and liabilities (including without
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limitation attorneys' fees and expenses) relating thereto, and Cleveland-Cliffs
hereby agrees to indemnify the Trustee and to be primarily liable for such
costs, expenses and liabilities.
(c) The Trustee may consult with legal counsel (which, after a
Change of Control, shall be independent with respect to the Company) with
respect to any of its duties or obligations hereunder, and shall be fully
protected in acting or refraining from acting in accordance with the advice of
such counsel.
(d) 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. 2 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, including, without limiting the scope of this
Section 8(d), (i) the notice of a Change of Control required by Section l(b)
hereof, and (ii) the certification and notice required by Section 2(c) hereof.
(e) The Trustee may hire agents, accountants and financial
consultants, who may be agents, accountants, or financial consultants, as the
case may be, for the Company, and shall not be answerable for the conduct of
same if appointed with due care.
(f) The Trustee shall have, without exclusion, all powers conferred
on trustees by applicable law unless expressly provided otherwise herein.
(g) The Trustee is empowered to take all actions necessary or
advisable in order to collect any benefits or payment of which the Trustee is
the designated beneficiary.
9. Amendments, Etc. to the Executive Agreements, the Severance Plan,
the Retention Plan and the Indemnification Agreements; Cooperation of
Cleveland-Cliffs. (a) Cleveland-Cliffs has previously furnished the Trustee a
complete and correct copy of each Executive Agreement, the Severance Plan, the
Retention Plan and each Indemnification
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Agreement. Any Indemnitee may, and Cleveland-Cliffs shall, provide the Trustee
with true and correct copies of any amendment, restatement or successor to any
Executive Agreement, the Severance Plan, the Retention Plan and any
Indemnification Agreement, 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; and provided,
further, that the failure of Cleveland-Cliffs to furnish any such amendment,
restatement, or successor shall in no way diminish the rights of any Indemnitee
under this Trust Agreement No. 2 or under any Executive Agreement, the Severance
Plan, the Retention Plan or any Indemnification Agreement.
(b) Cleveland-Cliffs shall provide the Trustee with all information
requested by the Trustee for purposes of determining payments to the Indemnitees
as provided in Section 2. Upon the failure of Cleveland-Cliffs or any Indemnitee
to provide any such information requested by the Trustee for purposes of
determining payments to the Indemnitees as provided in Section 2, the Trustee
shall, to the extent necessary in the sole judgment of the Trustee, (i) compute
the amount payable hereunder to any Indemnitee; and (ii) notify Cleveland-Cliffs
and the Indemnitee in writing of its computations. Thereafter this Trust
Agreement No. 2 shall be construed as to the Trustee's duties and obligation
hereunder in accordance with such Trustee determinations without further action;
provided, however, that no such determinations shall in any way diminish the
rights of the Indemnitees hereunder or under the Executive Agreements, Severance
Plan, Retention Plan or Indemnification Agreements, and provided, further, that
no such determination shall be deemed to modify this Trust Agreement No. 2 or
any Executive Agreement, the Severance Plan, the Retention Plan or any
Indemnification Agreement.
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(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 or Exhibit D for the purpose of the addition of
Indemnitees to Exhibit A or Exhibit D (or the deletion of Indemnitees
from Exhibit A or Exhibit D who are not currently and shall not in the
future be entitled to Expenses); provided, however, that no such
amendment shall be made after the date of a Change of Control, other
than to designate a different address pursuant to Section 14 hereof.
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(c) and 8(e) 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. The Trust shall have a
claim against Cleveland-Cliffs for any such compensation or expenses so
paid.
11. Replacement of the Trustee. (a) The Trustee may resign
after providing not less than 90 days' notice to Cleveland-Cliffs and,
on or after the date on which a Change of Control has occurred, to the
Executives, Key Employees and Directors/Officers. Prior to the date on
which a Change of Control has occurred, the Trustee may be removed at
any time by Cleveland-Cliffs. On or after such date, such removal shall
also require the agreement of a majority of the Executives, Key
Employees and Directors/Officers. Prior to the date on which a Change
of Control has occurred, a replacement or successor trustee shall be
appointed by Cleveland-Cliffs. On or after such date, such appointment
shall also require the agreement of a majority of the Executives, Key
Employees and Directors/Officers. No such removal or
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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 a majority of the Executives, Key
Employees and Directors/Officers (if required) 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, or the Trustee may apply to a court of
competent jurisdiction for the appointment of a successor trustee. The
costs and expenses of such application will be charged against the
Trust. Notwithstanding the foregoing, a new trustee shall be
independent and not subject to control of either Cleveland-Cliffs or
the Indemnitees. Upon the acceptance of the trust by a successor
trustee, the Trustee shall release all of the monies and other property
in the Trust to its successor, who shall thereafter for all purposes of
this Trust Agreement No. 2 be considered to be the "Trustee."
(b) For purposes of the removal or appointment of a trustee
under this Section 11, if any Executive, Key Employee or
Director/Officer shall be deceased or adjudged incompetent, such
person's personal representative (including his or her guardian,
executor or administrator) shall participate in such person's stead.
12. Amendment or Termination. (a) This Trust Agreement No. 2
may be amended at any time and to any extent by a written instrument
executed by the Trustee, Cleveland-Cliffs and, on or after the date on
which a Change of Control has occurred, a majority of the Executives,
Key Employees and Directors/Officers, except to make the Trust
revocable after it has become irrevocable in accordance with Section
l(b) hereof, or to alter Section 12(b) hereof, except that amendments
contemplated by Section 9 hereof shall be made as therein provided.
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(b) The Trust shall terminate upon the earliest of: (i) the
tenth anniversary of the date on which a Change of Control has
occurred; (ii) the sixth anniversary of the date on which a Change of
Control has occurred, provided that the Trustee has received no demand
for payment of Expenses prior to such anniversary; (iii) such time as
the Trust no longer contains any assets; (iv) such time as the Trustee
shall have received consents from all Indemnitees to the termination of
this Trust Agreement No. 2; or (v) there is no longer any living
Indemnitee under this Trust Agreement No. 2 and there is no pending
demand by the estate of any Indemnitee against the Trust.
(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 unless a determination is made by legal counsel
experienced in such matters that the assets of the Trust may not be
returned to Cleveland-Cliffs without violating Section 403(d)(2) of
ERISA, or any successor provision thereto. If such a determination is
made, any assets remaining in the Trust, after satisfaction of
liabilities hereunder, pursuant to the written direction of
Cleveland-Cliffs, shall be (i) distributed to any welfare benefit plan
(within the meaning of ERISA) maintained by Cleveland-Cliffs at the
time of distribution so established at such time in order to receive
such assets from this Trust, or (ii) otherwise applied to provide
benefits which may be provided by a welfare benefit plan (within the
meaning of ERISA), directly or through the purchase of insurance.
13. Severability, Alienation, Etc. (a) Any provision of this
Trust Agreement No. 2 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 Indemnitees
under this Trust Agreement No. 2 may not be anticipated (except as
herein expressly provided), assigned (either
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at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process. No benefit
actually paid to any Indemnitee by the Trustee shall be subject to any
claim for repayment by the Company or Trustee, except in the event of
(i) a false claim, or (ii) a payment is made to an incorrect
Indemnitee.
(c) This Trust Agreement No. 2 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.
(d) This Trust Agreement No. 2 may be executed in two or more
counterparts, each of which shall be considered an original agreement.
This Trust Agreement No. 2 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.
14. Notices. 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:
KeyBank National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Trust Counsel
If to Cleveland-Cliffs, to:
Cleveland-Cliffs Inc
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
If to an Indemnitee, to:
His or her last address shown on
the records of the Company
provided, however, that if any party or his or its successors shall
have designated a different address by notice to the other parties,
then to the last address so designated.
IN WITNESS WHEREOF, each of Cleveland-Cliffs and the Trustee
have caused counterparts of this Amended and Restated Trust Agreement
No. 2 effective as of the Effective Date to be executed on their behalf
on the date set forth above, each of which shall be an original
agreement.
CLEVELAND-CLIFFS INC
By: /s/ X. X. Xxxxxx
--------------------------------------
Its: VP, Human Resources
----------------------------------
KEYBANK NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Its: VP
----------------------------------
and
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------------
Its: AVP
----------------------------------
19
EXHIBIT A
AMENDED AND RESTATED TRUST AGREEMENT NO. 2
EXECUTIVES AND KEY EMPLOYEES
EXECUTIVES
Name Title
------------------------- -------------------------------------------
Xxxx X. Xxxxxx Chairman and Chief Executive Officer
Xxxxx X. Xxxxxxx Vice Chairman
Xxxxxx X. X'Xxxx President and Chief Operating Officer
Xxxxxxx X. Xxxxxx Executive Vice President-Commercial
Xxxxxxx X. Xxxxx Senior Vice President-Finance
KEY EMPLOYEES
Name Title
------------------------- -------------------------------------------------
X. X. Xxxxxxx. Jr. Senior Vice President - Operations
X. X. Xxxxxxxxx Senior Vice President - Business Operations
X. X. Xxxxxx Vice President - Human Resources
X. Xxxxx Vice President - Financial Planning and Treasurer
X. X. Xxxxxxxxx Vice President - Sales
X. X. Xxxxxx Vice President - Reduced Iron Sales
X. X. Xxxxxxx Vice President, Secretary and General Counsel
X. X. Xxxxxx Vice President and Controller
X. X. Xxxxxxxx General Manager - Northshore Mine
X. X. Xxxxxxxx General Manager - Cliffs and Associates Ltd.
X. X. Xxxxxxx General Manager - Empire Mine
X. X. Xxxxxx General Manager - Xxxxxx Mine
X. X. Xxxxxxx President - Wabush Mine
X. X. Xxxxx General Manager - Hibbing Taconite Mine
X. X. Xxxxx Assistant General Counsel and Assistant Secretary
EXHIBIT B
AMENDED AND RESTATED TRUST AGREEMENT NO. 2
FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT
This indemnification Agreement ("Agreement") is made as of the ____ day
of __________by and between Cleveland-Cliffs Inc, an Ohio corporation (the
"Company"), and ____________________________ (the "Indemnitee"), a Director of
the Company.
RECITALS
A. The Indemnitee is presently serving as a Director of the Company and
the Company desires the Indemnitee to continue in that capacity. The Indemnitee
is willing, subject to certain conditions including without limitation the
execution and performance of this Agreement by the Company, to continue in that
capacity.
B. In addition to the indemnification to which the Indemnitee is
entitled under the Regulations of the Company (the "Regulations"), the Company
has obtained, at its sole expense, insurance protecting the Company and its
officers and directors including the Indemnitee against certain losses arising
out of actual or threatened actions, suits, or proceedings to which such persons
may be made or threatened to be made parties. However, as a result of
circumstances having no relation to, and beyond the control of, the Company and
the Indemnitee, the scope of that insurance has been reduced and there can be no
assurance of the continuation or renewal of that insurance.
Accordingly, and in order to induce the Indemnitee to continue to serve
in his present capacity, the Company and the Indemnitee agree as follows:
1. Continued Service. The Indemnitee shall continue to serve at the will
of the Company as a Director of the Company so long as he is duly elected and
qualified in accordance with the Regulations or until he resigns in writing in
accordance with applicable law.
2. Initial Indemnity. (a) The Company shall indemnify the Indemnitee, if
or when he is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was a Director of the Company or
is or was serving at the request of the Company as a director, trustee, officer,
employee, or agent of another corporation, domestic or foreign, nonprofit or for
profit, partnership, joint venture, trust, or other enterprise, or by reason of
any action alleged to have been taken or omitted in any such capacity, against
any and all costs, charges, expenses (including without limitation fees and
expenses of attorneys and/or others; all such costs, charges and expenses being
herein jointly referred to as "Expenses"), judgments, fines, and amounts paid in
settlement, actually and reasonably incurred by the Indemnitee in connection
therewith including any appeal of or from any judgment or decision, unless it is
proved by clear and convincing evidence in a court of competent jurisdiction
that the Indemnitee's action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken
with reckless disregard for the best interests of the Company.
1
In addition, with respect to any criminal action or proceeding, indemnification
hereunder shall be made only if the Indemnitee had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, or conviction, or upon a plea of no
lo contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not satisfy the foregoing standard of conduct to the extent
applicable thereto.
(b) The Company shall indemnify the Indemnitee, if or when he is a party
or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding by or in the right of the Company to procure a
judgment in its favor, by reason of the fact that the Indemnitee is or was a
Director of the Company or is or was serving at the request of the Company as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against any and all Expenses actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement thereof or any appeal of
or from any judgment or decision, unless it is proved by clear and convincing
evidence in a court of competent jurisdiction that the Indemnitee's action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury to the Company or undertaken with reckless disregard for the best
interests of the Company, except that no indemnification shall be made in
respect of any action or suit in which the only liability asserted against
Indemnitee is pursuant to Section 1701.95 of the Ohio Revised Code.
(c) Any indemnification under Section 2(a) or 2(b) (unless ordered by a
court) shall be made by the Company only as authorized in the specific case upon
a determination that indemnification of the Indemnitee is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 2(a) or 2(b). Such authorization shall be made (i) by the Directors of
the Company (the "Board") by a majority vote of a quorum consisting of Directors
who were not and are not parties to or threatened with such action, suit, or
proceeding or (ii) if such a quorum of disinterested Directors is not available
or if a majority of such quorum so directs, in a written opinion by independent
legal counsel (designated for such purpose by the Board) which shall not be an
attorney, or a firm having associated with it an attorney, who has been retained
by or who has performed services for the Company, or any person to be
indemnified, within the five years preceding such determination, or (iii) by the
shareholders of the Company (the "Shareholders"), or (iv) by the court in which
such action, suit, or proceeding was brought.
(d) To the extent that the Indemnitee has been successful on the merits
or otherwise, including without limitation the dismissal of an action without
prejudice, in defense of any action, suit, or proceeding referred to in Section
2(a) or 2(b), or in defense of any claim, issue, or matter therein, he shall be
indemnified against Expenses actually and reasonably incurred by him in
connection therewith. Expenses actually and reasonably incurred by the
Indemnitee in defending any such action, suit, or proceeding shall be paid by
the Company as they are incurred in advance of the final disposition of such
action, suit, or proceeding under the procedure set forth in Section 4(b)
hereof.
2
(e) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on the Indemnitee with respect to any employee benefit
plan; references to "serving at the request of the Company" shall include any
service as a director, officer, employee, or agent of the Company which imposes
duties on, or involves services by, the Indemnitee with respect to an employee
benefit plan, its participants or beneficiaries; references to the masculine
shall include the feminine; and references to the singular shall include the
plural and VICE VERSA.
3. Additional Indemnification. Pursuant to Section 1701.13(E)(6) of the
Ohio Revised Code (the "ORC"), without limiting any right which the Indemnitee
may have pursuant to Section 2 hereof or any other provision of this Agreement
or the Articles of Incorporation, the Regulations, the ORC, any policy of
insurance, or otherwise, but subject to any limitation on the maximum
permissible indemnity which may exist under applicable law at the time of any
request for indemnity hereunder and subject to the following provisions of this
Section 3, the Company shall indemnify the Indemnitee against any amount which
he is or becomes obligated to pay relating to or arising out of any claim made
against him because of any act, failure to act, or neglect or breach of duty,
including any actual or alleged error, misstatement, or misleading statement,
which he commits, suffers, permits, or acquiesces in while acting in his
capacity as a Director of the Company. The payments which the Company is
obligated to make pursuant to this Section 3 shall include without limitation,
judgments, fines, and amounts paid in settlement and any and all Expenses
actually and reasonably incurred by the Indemnitee in connection therewith
including any appeal of or from any judgment or decision; PROVIDED, HOWEVER,
that the Company shall not be obligated under this Section 3 to make any payment
in connection with any claim against the Indemnitee:
(a) to the extent of any fine or similar governmental imposition
which the Company is prohibited by applicable law from paying which
results from a final, nonappealable order; or
(b) to the extent based upon or attributable to the Indemnitee
having actually realized a personal gain or profit to which he was not
legally entitled, including without limitation profit from the purchase
and sale by the Indemnitee of equity securities of the Company which are
recoverable by the Company pursuant to Section 16(b) of the Securities
Exchange Act of 1934, or profit arising from transactions in publicly
traded securities of the Company which were effected by the Indemnitee
in violation of Section 10(b) of the Securities Exchange Act of 1934, or
Rule 10b-5 promulgated thereunder.
A determination as to whether the Indemnitee shall be entitled to
indemnification under this Section 3 shall be made in accordance with Section
4(a) hereof. Expenses incurred by the Indemnitee in defending any claim to which
this Section 3 applies shall be paid by the Company as they are actually and
reasonably incurred in advance of the final disposition of such claim under the
procedure set forth in Section 4(b) hereof.
4. Certain Procedures Relating to Indemnification. (a) For purposes of
pursuing his rights to indemnification under Section 3 hereof,
3
the Indemnitee shall (i) submit to the Board a sworn statement of request for
indemnification substantially in the form of Exhibit I attached hereto and made
a part hereof (the "Indemnification Statement") averring that he is entitled to
indemnification hereunder; and (ii) present to the Company reasonable evidence
of all amounts for which indemnification is requested. Submission of an
Indemnification Statement to the Board shall create a presumption that the
Indemnitee is entitled to indemnification hereunder, and the Company shall,
within 60 calendar days after submission of the Indemnification Statement, make
the payments requested in the Indemnification Statement to or for the benefit of
the Indemnitee, unless (i) within such 60-calendar-day period the Board shall
resolve by vote of a majority of the Directors at a meeting at which a quorum is
present that the Indemnitee is not entitled to indemnification under Section 3
hereof, (ii) such vote shall be based upon clear and convincing evidence
(sufficient to rebut the foregoing presumption), and (iii) the Indemnitee shall
have received within such period notice in writing of such vote, which notice
shall disclose with particularity the evidence upon which the vote is based. The
foregoing notice shall be sworn to by all persons who participated in the vote
and voted to deny indemnification. The provisions of this Section 4(a) are
intended to be procedural only and shall not affect the right of Indemnitee to
indemnification under Section 3 of this Agreement so long as Indemnitee follows
the prescribed procedure and any determination by the Board that Indemnitee is
not entitled to indemnification and any failure to make the payments requested
in the Indemnification Statement shall be subject to judicial review by any
court of competent jurisdiction.
(b) For purposes of obtaining payments of Expenses in advance of final
disposition pursuant to the second sentence of Section 2(d) or the last sentence
of Section 3 hereof, the Indemnitee shall submit to the Company a sworn request
for advancement of Expenses substantially in the form of Exhibit 2 attached
hereto and made a part hereof (the "Undertaking"), averring that he has
reasonably incurred actual Expenses in defending an action, suit or proceeding
referred to in Section 2(a) or 2(b) or any claim referred to in Section 3, or
pursuant to Section 7 hereof. Unless at the time of the Indemnitee's act or
omission at issue, the Articles of Incorporation or Regulations of the Company
prohibit such advances by specific reference to ORC Section 1701.13(E)(5)(a) and
unless the only liability asserted against the Indemnitee in the subject action,
suit or proceeding is pursuant to ORC Section 1701.95, the Indemnitee shall be
eligible to execute Part A of the Undertaking by which he undertakes to (a)
repay such amount if it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee's action or failure to act involved
an act or omission undertaken with deliberate intent to cause injury to the
Company or undertaken with reckless disregard for the best interests of the
Company and (b) reasonably cooperate with the Company concerning the action,
suit, proceeding or claim. In all cases, the Indemnitee shall be eligible to
execute Part B of the Undertaking by which he undertakes to repay such amount if
it ultimately is determined that he is not entitled to be indemnified by the
Company under this Agreement or otherwise. In the event that the Indemnitee is
eligible to and does execute both Part A and Part B of the Undertaking, the
Expenses which are paid by the Company pursuant thereto shall be required to be
repaid by the Indemnitee only if he is required to do so under the terms of both
Part A and Part B of the Undertaking. Upon receipt of the Undertaking, the
Company
4
shall thereafter promptly pay such Expenses of the Indemnitee as are noticed to
the Company in writing and in reasonable detail arising out of the matter
described in the Undertaking. No security shall be required in connection with
any Undertaking.
5. Limitation on Indemnity. Notwithstanding anything contained herein to
the contrary, the Company shall not be required hereby to indemnify the
Indemnitee with respect to any action, suit, or proceeding that was initiated by
the Indemnitee unless (i) such action, suit, or proceeding was initiated by the
Indemnitee to enforce any rights to indemnification arising hereunder and such
person shall have been formally adjudged to be entitled to indemnity by reason
hereof, (ii) authorized by another agreement to which the Company is a party
whether heretofore or hereafter entered, or (iii) otherwise ordered by the court
in which the suit was brought.
6. Subrogation; Duplication of Payments. (a) In the event of any payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery previously vested in the Indemnitee,
who shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
(b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has actually received payment (under any insurance policy, the
Company's Regulations or otherwise) of the amounts otherwise payable hereunder.
7. Fees and Expenses of Enforcement. It is the intent of the Company
that the Indemnitee not be required to incur the expenses associated with the
enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. Accordingly, if it
should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any action, suit or proceeding to deny, or to recover from, the
Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of his choice, at the expense of the Company as hereafter provided, to
represent the Indemnitee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer, shareholder, or other person affiliated with the Company, in
any jurisdiction. Regardless of the outcome thereof, the Company shall pay and
be solely responsible for any and all costs, charges, and expenses, including
without limitation fees and expenses of attorneys and others, reasonably
incurred by the Indemnitee pursuant to this Section 7.
8. Merger or Consolidation. In the event that the Company shall be a
constituent corporation in a consolidation, merger, or other reorganization, the
Company, if it shall not be the surviving, resulting, or acquiring corporation
therein, shall require as a condition thereto that the
5
surviving, resulting, or acquiring corporation agree to assume all of the
obligations of the Company hereunder and to indemnify the Indemnitee to the full
extent provided herein. Whether or not the Company is the resulting, surviving,
or acquiring corporation in any such transaction, the Indemnitee shall also
stand in the same position under this Agreement with respect to the resulting,
surviving, or acquiring corporation as he would have with respect to the Company
if its separate existence had continued.
9. Nonexclusivity and Severability. (a) The rights to indemnification
provided by this Agreement shall not be exclusive of any other rights of
indemnification to which the Indemnitee may be entitled under the Articles of
Incorporation, the Regulations, the ORC or any other statute, any insurance
policy, agreement, or vote of shareholders or directors or otherwise, as to any
actions or failures to act by the Indemnitee, and shall continue after he has
ceased to be a Director, officer, employee, or agent of the Company or other
entity for which his service gives rise to a right hereunder, and shall inure to
the benefit of his heirs, executors, and administrators.
(b) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable,
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable, or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid, and legal.
10. Governing Law. This Agreement 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.
11. Modification. This Agreement and the rights and duties of the
Indemnitee and the Company hereunder may be modified only by an instrument in
writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
CLEVELAND-CLIFFS INC
By
-------------------------------------
President and Chief Executive Officer
-------------------------------------
[Signature of Indemnitee]
6
Exhibit l
INDEMNIFICATION STATEMENT
STATE OF )
) ss:
COUNTY OF )
I, _______________ being first duly sworn, do depose and say as follows:
1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement, dated , ___________, __________ between
Cleveland-Cliffs Inc (the "Company"), an Ohio corporation, and the undersigned.
2. I am requesting indemnification against costs, charges, expenses
(which may include fees and expenses of attorneys and/or others), judgments,
fines, and amounts paid in settlement (collectively, "Liabilities"), which have
been actually and reasonably incurred by me in connection with a claim referred
to in Section 3 of the aforesaid Indemnification Agreement.
3. With respect to all matters related to any such claim, I am entitled
to be indemnified as herein contemplated pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise out of
_______________________________________________________________________________
_______________________________________________________________________________.
__________________________
[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this_______ of _______ , _____________
[Seal]
My commission expires the_____day of___________, _____________
7
Exhibit 2
UNDERTAKING
STATE OF )
) ss:
COUNTY OF )
I, being first duly sworn, do depose and say as follows:
1. This Undertaking is submitted pursuant to the Indemnification
Agreement, dated ______________________________________ , between
Cleveland-Cliffs Inc (the "Company"), an Ohio corporation, and the undersigned.
2. I am requesting payment of costs, charges, and expenses which I have
reasonably incurred or will reasonably incur in defending an action, suit or
proceeding, referred to in Section 2(a) or 2(b) or any claim referred to in
Section 3, or pursuant to Section 7, of the aforesaid Indemnification Agreement.
3. The costs, charges, and expenses for which payment is requested are,
in general , all expenses related to ___________________________________________
________________________________________________________________________________
4. Part A
I hereby undertake to (a) repay all amounts paid pursuant hereto if it
is proved by clear and convincing evidence in a court of competent jurisdiction
that my action or failure to act which is the subject of the matter described
herein involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best
interests of the Company and (b) reasonably cooperate with the Company
concerning the action, suit, proceeding or claim.
______________________________
(Signature of Indemnitee)
4. Part B
I hereby undertake to repay all amounts paid pursuant hereto if it
ultimately is determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.
______________________________
(Signature of Indemnitee)
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this ____________day of ________________________,
_____________________.
[Seal]
My commission expires the ________ day of_____________,_______________.
8
EXHIBIT C
AMENDED AND RESTATED TRUST AGREEMENT NO. 2
FORM OF DIRECTOR/0FFICER INDEMNIFICATION AGREEMENT
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
This Director and Officer Indemnification Agreement
("AGREEMENT") is made as of _____________, by and between Cleveland-Cliffs Inc,
an Ohio corporation (the "COMPANY"), and ___________________ (the "INDEMNITEE"),
a Director and an officer of the Company.
RECITALS:
A. The Indemnitee is presently serving as a Director and an
officer of the Company and the Company desires the Indemnitee to continue in
such capacities. The Indemnitee is willing, subject to certain conditions
including without limitation the execution and performance of this Agreement by
the Company, to continue serving in such capacities.
B. In addition to the indemnification to which the Indemnitee
is entitled under the Regulations of the Company (the "REGULATIONS"), the
Company has obtained, at its sole expense, insurance protecting the Company and
its officers and Directors, including the Indemnitee, against certain losses
arising out of actual or threatened actions, suits, or proceedings to which such
persons may be made or threatened to be made parties.
Accordingly, and in order to induce the Indemnitee to continue
to serve in his present capacity, the Company and the Indemnitee agree as
follows:
AGREEMENT:
1. Continued Service. The Indemnitee shall continue to serve, at the
will of the Company or in accordance with a separate contract, to the extent
that such a contract is in effect at the time in question, as a Director and an
officer of the Company so long as he is duly elected and qualified in accordance
with the Regulations or until he resigns in writing in accordance with
applicable law.
2. Initial Indemnity. (a) The Company shall indemnify the Indemnitee if
or when he is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was a Director, officer, employee
or agent of the Company or is or was serving at the request of the Company as a
director, trustee, officer, employee, member, manager or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise, or by
reason of any action alleged to have been taken or omitted in any such capacity,
against any and all costs, charges, expenses (including without limitation fees
and expenses of attorneys and/or others; all such costs, charges and expenses
being herein jointly referred to as "EXPENSES"), judgments, fines, and amounts
paid in settlement, actually and reasonably incurred by the Indemnitee in
connection therewith, including any appeal of or from
any judgment or decision, unless it is proved by clear and convincing evidence
in a court of competent jurisdiction that the Indemnitee's action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best
interests of the Company, and, with respect to any criminal action or
proceeding, if the Indemnitee had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Indemnitee did not satisfy
the foregoing standard of conduct to the extent applicable thereto.
(b) The Company shall indemnify the Indemnitee if or when he is a
party, or is threatened to be made a party, to any threatened, pending, or
completed action, suit, or proceeding by or in the right of the Company to
procure a judgment in its favor, by reason of the fact that the Indemnitee is or
was a Director, officer, employee or agent of the Company or is or was serving
at the request of the Company as a director, trustee, officer, employee, member,
manager or agent of another corporation, domestic or foreign, nonprofit or for
profit, a limited liability company, or a partnership, joint venture, trust, or
other enterprise, against any and all Expenses actually and reasonably incurred
by the Indemnitee in connection with the defense or settlement thereof or any
appeal of or from any judgment or decision, unless it is proved by clear and
convincing evidence in a court of competent jurisdiction that the Indemnitee's
action or failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the Company or undertaken with reckless disregard for
the best interests of the Company, except that no indemnification pursuant to
this Section 2(b) shall be made in respect of any action or suit in which the
only liability asserted against the Indemnitee is pursuant to Section 1701.95 of
the Ohio Revised Code (the "ORC").
(c) Any indemnification under Section 2(a) or 2(b) (unless ordered by
a court) shall be made by the Company only as authorized in the specific case
upon a determination that indemnification of the Indemnitee is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 2(a) or 2(b). Such authorization shall be made (i) by the Board of
Directors of the Company (the "BOARD") by a majority vote of a quorum consisting
of Directors who were not and are not parties to or threatened with such action,
suit, or proceeding, or (ii) if such a quorum of disinterested Directors is not
available or if a majority of such quorum so directs, in a written opinion by
independent legal counsel (designated for such purpose by the Board) which shall
not be an attorney, or a firm having associated with it an attorney, who has
been retained by or who has performed services for the Company, or any person to
be indemnified, within the five years preceding such determination, or (iii) by
the shareholders of the Company (the "SHAREHOLDERS"), or (iv) by the court in
which such action, suit, or proceeding was brought.
(d) To the extent that the Indemnitee has been successful on the
merits or otherwise, including without limitation the dismissal of an action
without prejudice, in defense of any action, suit, or proceeding referred to in
Section 2(a) or 2(b), or in defense of any claim, issue, or matter therein, he
shall be indemnified against Expenses actually and reasonably incurred by him in
connection therewith.
(e) Expenses actually and reasonably incurred by the Indemnitee in
defending any such action, suit, or proceeding shall be paid by the Company as
they are incurred in advance of
2
the final disposition of such action, suit, or proceeding under the procedure
set forth in Section 4(b) hereof.
(f) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on the Indemnitee with respect to any employee benefit
plan; references to "serving at the request of the Company" shall include any
service as a Director, officer, employee, or agent of the Company which imposes
duties on, or involves services by, the Indemnitee with respect to an employee
benefit plan, its participants or beneficiaries; references to the masculine
shall include the feminine; references to the singular shall include the plural
and vice versa; and with respect to conduct by Indemnitee in his capacity as a
trustee, administrator or other fiduciary of any employee benefit plan of the
Company, if the Indemnitee acted in good faith and in a manner he reasonably
believed to be in the interest of the participants or beneficiaries of such
employee benefit plan, he shall be deemed to have acted in a manner "not opposed
to the best interests of the Company" as referred to herein.
(g) No amendment to the Amended Articles of Incorporation of the
Company (the "ARTICLES"), or the Regulations shall deny, diminish, or encumber
the Indemnitee's rights to indemnity pursuant to the Regulations, the Ohio
Revised Code (the "ORC"), or any other applicable law as applied to any act or
failure to act occurring in whole or in part prior to the date (the "EFFECTIVE
DATE") upon which the amendment was approved by the Shareholders. In the event
that the Company shall purport to adopt any amendment to its Articles or
Regulations or take any other action, the effect of which is to deny, diminish,
or encumber the Indemnitee's rights to indemnity pursuant to the Articles, the
Regulations, the ORC, or any such other law, such amendment shall apply only to
acts or failures to act occurring entirely after the Effective Date thereof.
3. Additional Indemnification. (a) Pursuant to Section 1701.13(E)(6) of
the ORC, without limiting any right which the Indemnitee may have pursuant to
Section 2 hereof or any other provision of this Agreement or the Articles, the
Regulations, the ORC, any policy of insurance, or otherwise, but subject to any
limitation on the maximum permissible indemnity which may exist under applicable
law at the time of any request for indemnity hereunder and subject to the
following provisions of this Section 3(a), the Company shall indemnify the
Indemnitee against any amount which he is or becomes obligated to pay relating
to or arising out of any claim made against him because of any act, failure to
act, or neglect or breach of duty, including any actual or alleged error,
misstatement, or misleading statement, which he commits, suffers, permits, or
acquiesces in while acting in his capacity as a Director or an officer of the
Company. The payments which the Company is obligated to make pursuant to this
Section 3(a) shall include without limitation judgments, fines, and amounts paid
in settlement and any and all Expenses actually and reasonably incurred by the
Indemnitee in connection therewith including any appeal of or from any judgment
or decision; provided, however, that the Company shall not be obligated under
this Section 3(a) to make any payment in connection with any claim against the
Indemnitee:
(i) to the extent of any fine or similar governmental
imposition which the Company is prohibited by applicable
law from paying which results from a final,
nonappealable order; or
3
(ii) to the extent based upon or attributable to the
Indemnitee having actually realized a personal gain or
profit to which he was not legally entitled, including
without limitation profit from the purchase and sale by
the Indemnitee of equity securities of the Company which
are recoverable by the Company pursuant to Section 16(b)
of the Securities Exchange Act of 1934, or profit
arising from transactions in publicly traded securities
of the Company which were effected by the Indemnitee in
violation of Section 10(b) of the Securities Exchange
Act of 1934, or Rule 10b-5 promulgated thereunder.
(b) A determination as to whether the Indemnitee shall be entitled to
indemnification under this Section 3(a) shall be made in accordance with Section
4(a) hereof. Expenses incurred by the Indemnitee in defending any claim to which
this Section 3(a) applies shall be paid by the Company as they are actually and
reasonably incurred in advance of the final disposition of such claim under the
procedure set forth in Section 4(b) hereof.
4. Certain Procedures Relating to Indemnification. (a) For purposes of
pursuing his rights to indemnification under Section 3(a) hereof, the Indemnitee
shall (i) submit to the Board a sworn statement of request for indemnification
substantially in the form of Exhibit l attached hereto and made a part hereof
(the "INDEMNIFICATION STATEMENT") averring that he is entitled to
indemnification hereunder; and (ii) present to the Company reasonable evidence
of all amounts for which indemnification is requested. Submission of an
Indemnification Statement to the Board shall create a presumption that the
Indemnitee is entitled to indemnification hereunder, and the Company shall,
within 60 calendar days after submission of the Indemnification Statement, make
the payments requested in the Indemnification Statement to or for the benefit of
the Indemnitee, unless (i) within such 60-calendar-day period the Board shall
resolve by vote of a majority of the Directors at a meeting at which a quorum is
present that the Indemnitee is not entitled to indemnification under Section
3(a) hereof, (ii) such vote shall be based upon clear and convincing evidence
(sufficient to rebut the foregoing presumption), and (iii) the Indemnitee shall
have received within such period notice in writing of such vote, which notice
shall disclose with particularity the evidence upon which the vote is based. The
foregoing notice shall be sworn to by all persons who participated in the vote
and voted to deny indemnification. The provisions of this Section 4(a) are
intended to be procedural only and shall not affect the right of Indemnitee to
indemnification under Section 3(a) of this Agreement so long as Indemnitee
follows the prescribed procedure, and any determination by the Board that
Indemnitee is not entitled to indemnification and any failure to make the
payments requested in the Indemnification Statement shall be subject to judicial
review by any court of competent jurisdiction.
(b) For purposes of obtaining payments of Expenses in advance of
final disposition pursuant to Section 2(e) or the last sentence of Section 3(b),
the Indemnitee shall submit to the Company a sworn request for advancement of
Expenses substantially in the form of Exhibit 2 attached hereto and made a part
hereof (the "UNDERTAKING"), averring that he has reasonably incurred actual
Expenses in defending an action, suit or proceeding referred to in Section 2(a)
or 2(b) or any claim referred to in Section 3(a), or pursuant to Section 7
hereof. The Indemnitee shall execute Part A of the Undertaking by which he
undertakes to: (i) repay such
4
amount if it is proved by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee's action or failure to act involved an act or
omission undertaken with deliberate intent to cause injury to the Company or
undertaken with reckless disregard for the best interests of the Company; and
(ii) reasonably cooperate with the Company concerning the action, suit,
proceeding or claim. In all cases, Indemnitee shall be eligible to execute Part
B of the Undertaking by which he undertakes to repay such amount if it
ultimately is determined that he is not entitled to be indemnified by the
Company under this Agreement or otherwise. In the event that the Indemnitee is
eligible to and does execute both Part A and Part B of the Undertaking, the
Expenses which are paid by the Company pursuant thereto shall be required to be
repaid by the Indemnitee only if he is required to do so under the terms of both
Part A and Part B of the Undertaking. Upon receipt of the Undertaking, the
Company shall thereafter promptly pay such Expenses of the Indemnitee as are
noticed to the Company in writing in reasonable detail arising out of the matter
described in the Undertaking. No security shall be required in connection with
any Undertaking.
5. Limitation on Indemnity. Notwithstanding anything contained herein
to the contrary, the Company shall not be required hereby to indemnify the
Indemnitee with respect to any action, suit, or proceeding that was initiated by
the Indemnitee unless (i) such action, suit, or proceeding was initiated by the
Indemnitee to enforce any rights to indemnification arising hereunder and such
person shall have been formally adjudged to be entitled to indemnity by reason
hereof, (ii) authorized by another agreement to which the Company is a party
whether heretofore or hereafter entered, or (iii) otherwise ordered by the court
in which the suit was brought.
6. Subrogation; Duplication of Payments. (a) In the event of payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
(b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has actually received payment (under any insurance policy, the
Regulations or otherwise) of the amounts otherwise payable hereunder.
7. Fees and Expenses of Enforcement. It is the intent of the Company
that the Indemnitee not be required to incur the expenses associated with the
enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. Accordingly, if it
should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any action, suit or proceeding to deny, or to recover from, the
Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of his choice, at the expense of the Company as hereafter provided, to
represent the Indemnitee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
Director, officer, shareholder, or other
5
person affiliated with the Company, in any jurisdiction. Regardless of the
outcome thereof, the Company shall pay and be solely responsible for any and all
costs, charges, and expenses, including without limitation, fees and expenses of
attorneys and others, reasonably incurred by the Indemnitee pursuant to this
Section 7.
8. Merger or Consolidation. In the event that the Company shall be a
constituent corporation in a consolidation, merger, or other reorganization, the
Company, if it shall not be the surviving, resulting, or acquiring corporation
therein, shall require as a condition thereto that the surviving, resulting, or
acquiring corporation agree to assume all of the obligations of the Company
hereunder and to indemnify the Indemnitee to the full extent provided herein.
Whether or not the Company is the resulting, surviving, or acquiring corporation
in any such transaction, the Indemnitee shall also stand in the same position
under this Agreement with respect to the resulting, surviving, or acquiring
corporation as he would have with respect to the Company if its separate
existence had continued.
9. Nonexclusivity and Severability. (a) The rights to indemnification
provided by this Agreement shall not be exclusive of any other rights of
indemnification to which the Indemnitee may be entitled under the Articles, the
Regulations, the ORC or any other statute, any insurance policy, agreement, or
vote of shareholders or Directors or otherwise, as to any actions or failures to
act by the Indemnitee, and shall continue after he has ceased to be a Director,
officer, employee, or agent of the Company or other entity for which his service
gives rise to a right hereunder, and shall inure to the benefit of his heirs,
executors and administrators. In the event of any payment under this Agreement,
the Company shall be subrogated to the extent thereof to all rights of recovery
previously vested in the Indemnitee, who shall execute all instruments and take
all other actions as shall be reasonably necessary for the Company to enforce
such rights.
(b) Except as provided in Section 9(a), the rights to indemnification
provided by this Agreement are personal to Indemnitee and are non-transferable
by Indemnitee, and no party other than the Indemnitee is entitled to
indemnification under this Agreement.
(c) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.
10. Security. To ensure that the Company's obligations pursuant to this
Agreement can be enforced by Indemnitee, the Company may, at its option,
establish a trust pursuant to which the Company's obligations pursuant to this
Agreement and other similar agreements can be funded.
11. Notices. All notices and other communications hereunder shall be in
writing and shall be personally delivered or sent by recognized overnight
courier service (a) if to the Company, to the then-current principal executive
offices of the Company (Attention: General Counsel) or (b) if to the Indemnitee,
to the last known address of Indemnitee as reflected in the
6
Company's records. Either party may change its address or the delivery of
notices or other communications hereunder by providing notice to the other party
as provided in this Section 12. All notices shall be effective upon actual
delivery by the methods specified in this Section 12.
12. Governing Law. This Agreement 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.
13. Modification. This Agreement and the rights and duties of the
Indemnitee and the Company hereunder may be modified only by an instrument in
writing signed by both parties hereto.
14. Prior Agreement. This Agreement amends and restates the Officer
Indemnification Agreement, dated as of _______________(the "PRIOR AGREEMENT"),
between the Company and the Indemnitee, which Prior Agreement shall, without
further action, be superseded as of the date first above written.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
CLEVELAND-CLIFFS INC
By:
----------------------------------
Name:
Title:
----------------------------------
Indemnitee
7
Exhibit 1
INDEMNIFICATION STATEMENT
STATE OF )
___________________________________
) SS
COUNTY OF )
___________________________________
I, ________________ , being first duly sworn, do depose and say as
follows:
1. This Indemnification Statement is submitted pursuant to the Director
and Officer Indemnification Agreement, dated ____________ __, _________, between
Cleveland-Cliffs Inc, an Ohio corporation (the "COMPANY"), and the undersigned.
2. I am requesting indemnification against costs, charges, expenses
(which may include fees and expenses of attorneys and/or others), judgments,
fines, and amounts paid in settlement (collectively, "LIABILITIES"), which have
been actually and reasonably incurred by me in connection with a claim referred
to in Section 3(a) of the aforesaid Indemnification Agreement.
3. With respect to all matters related to any such claim, I am entitled
to be indemnified as herein contemplated pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise out of
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________ .
_________________________
[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this ____ day of ____________, ____.
_________________________
[Seal]
My commission expires the ____ day of _____________, ______.
Exhibit 2
UNDERTAKING
STATE OF )
___________________________________
) SS
COUNTY OF )
___________________________________
I, ____________________, being first duly sworn, do depose and
say as follows:
l. This Undertaking is submitted pursuant to the Director and
Officer Indemnification Agreement, dated ____________ __, ________, between
Cleveland-Cliffs Inc, an Ohio corporation (the "COMPANY") and the undersigned.
2. I am requesting payment of costs, charges, and expenses
which I have reasonably incurred or will reasonably incur in defending an
action, suit or proceeding, referred to in Section 2(a) or 2(b) or any claim
referred to in Section 3(a), or pursuant to Section 8, of the aforesaid
Indemnification Agreement.
3. The costs, charges, and expenses for which payment is requested are,
in general, all expenses related to ___________________________________________
_______________________________________________________________________________
_______________________________________________________________________.
4. Part A(1)
I hereby undertake to (a) repay all amounts paid pursuant hereto if it
is proved by clear and convincing evidence in a court of competent jurisdiction
that my action or failure to act which is the subject of the matter described
herein involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best
interests of the Company and (b) reasonably cooperate with the Company
concerning the action, suit, proceeding or claim.
_________________________
[Signature of Indemnitee]
4. Part B
--------
(1) The Indemnitee shall not be eligible to execute Part A of this Undertaking
if, at the time of the Indemnitee's act or omission at issue, the Articles or
the Regulations of the Company prohibit such advances by specific reference to
the Ohio Revised Code (the "ORC") Section 1701.13(E)(5)(a), or if the only
liability asserted against the Indemnitee is in an action, suit or proceeding on
the Company's behalf pursuant to ORC Section 1701.95. In the event that the
Indemnitee is eligible to and does execute both Part A and Part B hereof, the
costs, charges and expenses which are paid by the Company pursuant hereto shall
be required to be repaid by the Indemnitee only if he is required to do so under
the terms of both Part A and Part B hereof.
I hereby undertake to repay all amounts paid pursuant hereto if it
ultimately is determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.
_________________________
[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this ____ day of ___________, ____.
[Seal]
_________________________
My commission expires the _____ day of _______________, ____.
EXHIBIT D
AMENDED AND RESTATED TRUST AGREEMENT NO. 2.
DIRECTORS/OFFICERS
Directors
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Ranks Xxxxx
Xxxxx D. Ireland III
G. Xxxxx Xxxxxx
E. Xxxxxxx Xxxxx
Xxxxxx Xxxxx Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxxxxx
M. Xxxxxx Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxxxxx
Directors/Officers
Xxxxx X. Xxxxxxx
