Exhibit 10(nnn)
CLIFFS NATURAL RESOURCES
INC.
NONEMPLOYEE DIRECTORS’
COMPENSATION PLAN
(AS AMENDED AND RESTATED
EFFECTIVE DECEMBER 31, 2008)
Recitals
WHEREAS, Cliffs Natural Resources
Inc. (formerly named Cleveland-Cliffs Inc) (“Company”),
with approval of the Company’s shareholders on May 14,
1996, established the Cleveland-Cliffs Inc Nonemployee
Directors’ Compensation Plan (“Plan”), effective
July 1, 1996;
WHEREAS, with approval of the Board
of Directors of the Company (“Board”), the Plan was
amended by the First Amendment to the Plan effective
November 12, 1996;
WHEREAS, with the approval of the
Board, the Plan was further amended by the Second Amendment to the
Plan, effective May 13, 1997;
WHEREAS, with the approval of the
Board, the Plan was further amended by the Third Amendment,
effective January 1, 1999;
WHEREAS, with the approval of the
Board and the shareholders, the Plan was further amended by the
Fourth Amendment, effective May 8, 2001;
WHEREAS, with the approval of the
Board, the Plan was amended and restated, effective January 1,
2004 and further amended and restated, effective as of
January 1, 2005.
WHEREAS, the Company now desires to
further amend and restate the Plan; and
WHEREAS, the Board has approved such
amendment and restatement, effective December 31, 2008, in
accordance with Section 8.2 of the Plan.
Amendment and
Restatement
NOW, THEREFORE, the Plan is amended
and restated as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are
used in this Plan they shall have the meanings specified below
unless the context clearly indicates to the contrary:
(a) “Account”: A
Deferred Fee Account and/or a Deferred Share Account, as the
context may require.
(b) “Accounting Date”:
December 31 of each year and the last day of each calendar
quarter.
(c) “Accounting Period”:
The quarterly period beginning on the date immediately following an
Accounting Date and ending the next following Accounting
Date.
(d) “Administrator”: The
Board Affairs Committee of the Board or any successor committee
designated by the Board.
(e) “Annual Equity
Grants”: The Restricted Shares or Shares awarded annually
pursuant to Section 3.1.
(f) “Beneficiary”: The
person or persons (natural or otherwise) designated pursuant to
Section 7.7.
(g) “Board”: The Board
of Directors of the Company.
(h) “Change in Control”:
The meaning set forth in Section 3.1(b).
(i) “Code”: The Internal
Revenue Code of 1986, as amended.
(j) “Company”: Cliffs
Natural Resources Inc. (formerly named Cleveland-Cliffs Inc) or any
successor or successors thereto.
(k) “Declared Rate”: The
Moody’s Corporate Average Bond Yield as adjusted on the first
business day of January, April, July and October or such other rate
as the Administrator shall determine from time to time.
(l) “Deferral
Commitment”: An agreement made by a Director in a
Participation Agreement to have all of his or her Annual Equity
Grant and/or all or a specified portion of his or her Fees,
Required Retainer Shares and/or Voluntary Shares deferred under the
Plan for a specified period in the future.
(m) “Deferral Period”:
The Plan Year for which a Director has elected to defer all of his
or her Annual Equity Grant and/or all or a portion of his or her
Fees, Required Retainer Shares and/or Voluntary Shares.
(n) “Deferred Fees”: The
Fees credited to a Director’s Deferred Fee Account pursuant
to Articles IV and V and payable to a Director pursuant to Article
VII.
(o) “Deferred Fee
Account”: The account maintained on the books of the Company
for each Director pursuant to Article V.
(p) “Deferred Shares”:
The Annual Equity Grant, Required Retainer Shares and Voluntary
Shares credited to a Director’s Deferred Share Account
pursuant to Articles IV and VI and payable to a Director pursuant
to Article VII.
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(q) “Deferred Share
Account”: The account maintained on the books of the Company
for each Director pursuant to Article VI, which is comprised of the
Deferred Share Annual Equity Subaccount and the Deferred Share
Other Equity Subaccount.
(r) “Deferred Share Annual
Equity Subaccount”: The subaccount maintained on the books of
the Company pursuant to Article VI for each Director who makes a
Deferral Commitment with respect to one or more Annual Equity
Grants.
(s) “Deferred Share Other
Equity Subaccount”: The subaccount maintained on the books of
the Company pursuant to Article VI for each Director who makes a
Deferral Commitment with respect to Required Retainer Shares and/or
Voluntary Shares.
(t) “Director”: An
individual duly elected or chosen as a Director of the Company who
is not also an employee of the Company or any of its
subsidiaries.
(u) “Director Share Ownership
Guidelines”: Guidelines relating to ownership of Shares by
Directors as established by the Administrator from time to
time.
(v) “Disability” or
“Disabled”: A Director shall be deemed to have a
“Disability” or be “Disabled” if the
Director is (i) unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, (ii)by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not
less than 3 months under an employer-sponsored accident and health
plan, or (iii) determined to be totally disabled by the Social
Security Administration.
(w) “Election Filing
Date”: December 31 of the calendar year next preceding
the first day of (i) in the case of dividends deferred under
Section 3.1(e) of the Plan, the Plan Year in which Restricted
Shares (on which such dividends are declared) are granted
(ii) in the case of Fees, the Deferral Period in which the
Fees would otherwise be earned (iii) in the case of an Annual
Equity Grant, the Deferral Period in which the Restricted Shares or
Shares would otherwise be awarded (iv) in the case of Required
Retainer Shares and Voluntary Shares, the Deferral Period in which
such shares would otherwise be earned.
(x) “Fair Market Value”:
With respect to a Share, the last reported closing price for a
Share on the New York Stock Exchange (or any appropriate
over-the-counter market if the Shares are no longer listed on such
Exchange) for a day specified herein for which such fair market
value is to be calculated, or if there was no sale of Shares so
reported for such day, on the most recently preceding day on which
there was such a sale.
(y) “Fees”: The portion
of the annual Retainer and other Director compensation payable in
cash.
(z) “Participation
Agreement”: The agreement submitted by a Director to the
Administrator in which a Director may specify an amount of
Voluntary Shares, or may elect to defer receipt of all of his
Annual Equity Grant and/or all or any portion of his or her Fees,
Required Retainer Shares and/or Voluntary Shares for a specified
period in the future.
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(aa) “Plan”: The Plan
set forth in this instrument as it may from time to time be
amended.
(bb) “Plan Year”: The
12-month period beginning January 1 and ending
December 31.
(cc) “Prior Plan”: The
Company’s Plan for Deferred Payment of Directors’ Fees
originally adopted in 1981.
(dd) “Restricted
Shares”: Shares automatically awarded pursuant to
Section 3.1 as to which neither the substantial risk of
forfeiture nor the restrictions on transfer referred to in
Section 3.1 hereof have expired.
(ee) “Retainer”: The
portion of a Director’s annual compensation that is payable
without regard to number of Board or committee meetings attended,
committee positions or the Lead Director position.
(ff) “Required Retainer
Shares”: Such number of Shares or dollar value of a
Director’s Retainer as the Administrator may specify from
time to time as the portion of a Director’s Retainer required
to be paid in Shares, less any amount such Director may have
elected to receive in cash pursuant to Section 3.2
(a)(ii).
(gg) “Rule 16b-3”: Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (or any
successor rule to the same effect), as in effect from time to
time.
(hh) “Settlement Date”:
The date which is the earliest to occur of the following:
(i) the date of a Director’s Termination of Service
(including by death); (ii) the date a Director becomes
Disabled; (iii) the date of the occurrence of a Change in
Control of the Company that constitutes a “change in the
ownership or effective control” or a “change in the
ownership or substantial portion of the assets” of the
Company within the meaning of Section 409A(a)(2)(A)(v) of the
Code and Treasury Regulation Section 1.409A-3(i)(5), or any
successor provision; or (iv) the date prior to the date of
Termination of Service selected by a Director pursuant to a
Specified Date Payment Election for distribution of all of his or
her Annual Equity Grants and/or all or any portion of his or her
Fees, Required Retainer Shares and/or Voluntary Shares deferred
during such Deferral Period as provided in
Section 7.3.
(ii) “Shares”: The
Company’s fully paid, non-assessable Common Shares, par value
$0.125 per share. Shares may be shares of original issuance or
treasury shares or a combination of the foregoing.
(jj) “Specified
Employee”: A specified employee with respect to the Company
(or a controlled group member of the Company) determined pursuant
to procedures adopted by the Company in compliance with
Section 409A of the Code.
(kk) “Specified Date Payment
Election”: The portion of a Participation Agreement completed
by a Director that indicates the form of distribution of the
Director’s Deferred Fee Account, Deferred Share Annual Equity
Subaccount, and/or the Deferred Share Other Equity Subaccount that
will be deferred until a specified date designated by the
Director.
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(ll) “Termination of
Service”: A termination of service with the Company that
constitutes a separation from service within the meaning of
Treasury Regulation Section 1.409A-1(h).
(mm) “Unforeseeable
Emergency”: A severe financial hardship to a Director
resulting from (i) an illness or accident of the Director or
Beneficiary or his or her spouse or dependent (as defined in
Section 152(a) of the Code), (ii) loss of the
Director’s property due to casualty, or (iii) other
similar or extraordinary circumstances arising as a result of
events beyond the control of the Director.
(nn) “Voluntary Shares”:
The meaning set forth in Section 3.2(b).
ARTICLE II.
PURPOSE
The purpose of this Plan is to
provide for the Annual Equity Grant to Directors and for the
payment to Directors of a portion of the Retainer earned by them
for services as Directors in Shares in order to further align the
interests of Directors with the shareholders of the Company and
thereby promote the long-term success and growth of the Company. In
addition, the Plan is intended to provide Directors with
opportunities to invest additional amounts of their compensation
payable for services as a Director in Shares and defer receipt of
any or all of such compensation.
ARTICLE III. ANNUAL EQUITY
GRANTS, REQUIRED RETAINER SHARES
AND VOLUNTARY
SHARES
3.1 Automatic Annual Equity
Grants .
(a) For the year 2008 and subsequent
years, unless otherwise determined by the Board, each Director,
shall automatically receive each year on the date of the annual
meeting, the number of Restricted Shares equal to $75,000 divided
by the Fair Market Value of a Share on the date of the annual
meeting. Each Director who joins the Board after an annual meeting,
shall receive a pro-rated amount of Restricted Shares from the date
such Director joins the Board. Notwithstanding the foregoing, any
Director who is age 69 years old or older on the date of an annual
meeting shall, in lieu of Restricted Shares, receive an equal
number of Shares (with no restrictions).
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(b) The Restricted Shares may not be
assigned, exchanged, pledged, sold, transferred or otherwise
disposed of by a Director, except to the Company, and shall be
subject to forfeiture as herein provided until the earliest to
occur of the following (“Vesting Event”): (a) the
third anniversary of the date of award; (b) a Change in
Control (as defined below); (c) death; or (d) Disability.
Any purported transfer in violation of the provisions of this
paragraph shall be null and void, and the purported transferee
shall obtain no rights with respect to such Restricted Shares. For
purposes of this Section 3.1, “Change in Control”
shall mean the occurrence of any of the following
events:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934, as
amended (the “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 voting stock of the Company;
provided, however, that for purposes of this Section 3.1(b)(i)
of Article III, the following acquisitions shall not constitute a
Change in Control: (A) any issuance of voting stock of the
Company directly from the Company that is approved by the Incumbent
Board (as defined in Section 3.1(b)(ii) of Article III below),
(B) any acquisition by the Company of voting stock of the
Company, (C) any acquisition of voting stock of the Company by
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any subsidiary, or (D) any
acquisition of voting stock of the Company by any Person pursuant
to a Business Combination that complies with clauses (A),
(B) and (C) of Section 3.1(b)(iii) of
Article III, below; or
(ii) individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a Director
subsequent to the date hereof whose election, or nomination for
election by the Company’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 the Company in which such person is named as a
nominee for director, without objection to such nomination) shall
be deemed to have been a 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 the Company, a
sale or other disposition of all or substantially all of the assets
of the Company, or any other transaction involving the Company
(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 the Company 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 the Company or all or
substantially all of the Company’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 the
Company, (B) no Person (other than the Company, such entity
resulting from such Business Combination, or any employee benefit
plan (or related trust) sponsored or maintained by the Company, 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 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
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(iv) approval by the shareholders of
the Company of a complete liquidation or dissolution of the
Company, except pursuant to a Business Combination that complies
with clauses (A), (B) and (C) of Section 3.1(b)(iii)
of Article III.
For purposes of this
Section 3.1(b) of Article III, voting stock means securities
entitled to vote generally in the election of directors, and
subsidiary means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding capital
or profits interests or voting stock.
(c) All of the Restricted Shares
shall be forfeited by a Director who is terminated before a Vesting
Event; provided, however, if service as a Director is terminated by
the Company owing to removal as a Director without cause before the
third anniversary of the date of an award, a portion of the
Restricted Shares covered by such award that then remain
forfeitable shall become freely transferable and nonforfeitable on
a prorated basis (rounded up to the nearest whole Restricted Share)
for the number of full months the Director remains on the Board
during the three-year period from the date of grant.
(d) Unless otherwise directed by the
Administrator, all certificates representing Restricted Shares
shall be held in custody by the Company until the occurrence of a
Vesting Event. As a condition to each award of Restricted Shares,
unless otherwise determined by the Administrator, each Director
shall have delivered to the Company a stock power, endorsed in
blank, relating to the Restricted Shares covered by such award.
After the occurrence of a Vesting Event, assuming no event has
occurred that would effect a forfeiture of a Director’s
Restricted Shares, a certificate or certificates evidencing
unrestricted ownership of such Shares shall be delivered to the
Director.
(e) With respect to dividends on
Restricted Shares:
(i) A Director may elect, prior to
December 31, 2005 or the applicable Election Filing Date for
any Plan Year thereafter, that all cash dividends declared with
respect to Restricted Shares awarded during such Plan Year shall be
deferred and reinvested in additional Common Shares during the
period of restriction of such Restricted Shares and which shall be
subject to the same restrictions as such Restricted Shares. Such
deferral election shall be effective as of the applicable Election
Filing Date and shall apply to dividends declared on Restricted
Shares granted in the Plan Year following the applicable Election
Filing Date and in each subsequent Plan Year unless terminated for
a subsequent Plan Year by filing a termination election by the
applicable Election Filing Date for such subsequent Plan
Year.
(ii) In addition, any Director who
joins the Board on or after January 1 of any Plan Year may
make such an election with respect to dividends declared on his or
her award of Restricted Shares within 30 days after becoming a
Director. Such deferral election shall be effective when filed and
shall apply only to dividends declared on Restricted Shares granted
during the remainder of such Plan Year and in each subsequent Plan
Year unless terminated for a subsequent Plan Year by filing a
termination election by the applicable Election Filing Date for
such subsequent Plan Year.
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(iii) Once such a deferral election
has been terminated, another deferral election may not be
made.
(iv) All such deferred dividends
shall be reinvested and held in the Director’s name and shall
be delivered as additional unrestricted Common Shares on the
applicable Vesting Date, subject to vesting as provided in
Section 3.1(b) hereof and proration as provided in
Section 3.1(c) hereof.
3.2 Required Retainer Shares and
Voluntary Shares .
(a) Payment of Retainer
.
(i) Subject to
Section 3.2(a)(ii), Section 3.2(b) and Article IV of this
Plan, the Retainer established by the Administrator from time to
time shall be payable in part as Required Retainer Shares payable
on January 1 of the following year, and the balance of such
Retainer and all other Fees shall be payable in cash quarterly in
advance of each Accounting Period.
(ii) If a Director meets the
Director Share Ownership Guidelines on December 1 of 2004 or
any year thereafter, such Director may elect, by the filing of a
Participation Agreement or such other form as may be approved by
the Administrator by March 29, 2004 or by December 15 of
such year, as applicable, to have up to 100% of such
Director’s Retainer paid by the Company in cash. Such
election shall apply to the Director’s Retainer for the Plan
Year commencing January 1, 2004 or the Plan Year following
such election, as applicable.
(b) Voluntary Shares . Prior
to the commencement of any calendar quarter, a Director may elect
by the filing of a Participation Agreement to have up to 100% of
his or her Fees for such quarter paid by the Company in the form of
Voluntary Shares and in lieu of the cash payment. Such
Participation Agreement must be filed as a one-time election. Such
election, unless subsequently terminated, shall apply to a
Director’s Fees for the remainder of the current Plan Year
and each subsequent Plan Year. Once an election has been terminated
another election may not be made.
(c) Issuance of Shares . On
the first business day of each year the Company shall issue
(i) to each Director a number of Shares equal to such
Director’s Required Retainer Shares for each Accounting
Period during the prior Plan Year divided by the Fair Market Value
per Share on the first day of such Accounting Period and
(ii) to each Director who has made an election under
Section 3.2(b), a number of Shares for each such Accounting
Period equal to the portion of such Director’s Fees for such
Accounting Period that such Director has elected to receive as
Voluntary Shares for such Accounting Period divided by
the
