Exhibit
10(b)
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Separation Agreement and Release of Claims
(“Agreement”) is made by and between Randy L. Kummer
(hereinafter referred to as “Employee”) and the
Cleveland-Cliffs Inc (hereinafter referred to as
“Employer”).
WITNESSETH
WHEREAS, Employee has elected to resign his employment as Senior
Vice President, Human Resources; and
WHEREAS, Employee and Employer desire to establish an amicable
separation of Employee’s employment and to settle fully and
finally any and all differences between them which have arisen, or
may arise, out of the employment relationship and/or the
termination of that relationship.
NOW, THEREFORE, in consideration of the mutual promises, payment
and benefits hereunder contained and intending to be legally bound
hereby, the parties represent, warrant, covenant and agree as
follows:
A. Employee’s
employment with Employer will be terminated effective
October 3, 2009 (“Date of Separation”).
B. Within thirty
(30) days after the Effective Date of this Agreement, stated
below, Employee shall receive a lump sum payment equal to two
years’ base pay (at his regular base compensation rate of
$274,000 per year) for a total of $548,000, plus $160,000, an
amount approximating Employee’s expected payout under the
Company’s 2008 Executive Management Performance Incentive
(EMPI) Plan, pro-rated for service during 2008, minus appropriate
withholdings and deductions including, but not limited to,
applicable FICA deductions and federal, state and city income tax
deductions (the “Severance Payment”).
C. Performance
Shares, Retention Unit and Restricted Stock Unit Grants that
Employee has received under the Company’s Long-Term Incentive
Plans during the period of his employment with the Company will be
prorated based upon the number of months of employment with the
Company during the incentive period and awarded on the date and on
the same calculation basis as such awards are made at the end of
the respective incentive periods to which they apply, less
appropriate withholdings and deductions including, but not limited
to, applicable FICA deductions and federal, state and city income
taxes. Restricted Stock granted to Employee in 2006 under the
Company’s 1992 Incentive Equity Plan shall become
non-forfeitable on the date of Separation, as if Employee had been
involuntarily terminated without cause, and shall be so paid in
accordance with the terms of Employee’s 2006 Restricted Stock
Agreement.
D. In addition to
the Severance Payment, Performance Shares, Retention Units,
Restricted Stock Units and Restricted Stock set forth above,
Employee and eligible dependents shall be entitled to continuation
of coverage under Employer’s health/medical and dental
insurance plans at his own expense pursuant to any rights he may
have under the federal Consolidated Omnibus Budget Reconciliation
Act, as amended (“COBRA”), part VI of Subtitle B of
Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended Internal Revenue Code § 4980
B(f). Such continuation shall be afforded up to a maximum period
provided by law so long as Employee submits payments for elected
coverage and otherwise complies with conditions of continuation on
a timely basis.
As additional consideration for Employee’s covenants and
obligations hereunder, should Employee elect such continued
coverage under Employer’s health/medical insurance plan,
Employer shall pay all premiums for such coverage and for coverage
under the
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Employer’s dental
insurance plan, less any employee contributions required of
similarly-situated employees pursuant to Employer’s policies,
customs and practices, for a period of twenty four (24) months
following the Date of Separation or until Employee becomes eligible
to participate in any plan similar to that provided by the Company,
through subsequent employment or otherwise, whichever occurs first.
Thereafter, Employee must timely submit required payments and
otherwise comply with conditions for continuation should he wish
his benefits to be continued consistent with his legal
entitlements. For the purposes of this paragraph, a “similar
plan” is defined as any plan covering the same benefit
without regard to specific entitlements thereunder.
E. As further
consideration for Employee’s covenants and obligations
hereunder, Employee shall, for a period of up to twelve
(12) months following the Date of Separation, be eligible to
receive Employer paid Relocation Assistance as otherwise available
to full-time, exempt salaried employees transferring within North
America (under the Employer’s Relocation Assistance Guideline
effective as of January 1, 2008), provided such benefits are
not paid by another employer.
F. Employer will
engage an executive outplacement service to assist Employee in
finding suitable employment. Such service shall begin within six
months following the Date of Separation at a time designated by
Employee and will be available to Employee at no cost to Employee
for a period of up to 12 months following the beginning of such
outplacement service.
G. Employee may
retain the IBM laptop computer that he presently uses and title
shall be transferred to Employee. Continued use of programs on that
computer will be subject to limitations that may apply to
Employer’s licenses for such programs.
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H. Employee
acknowledges and agrees that the Severance Payment, Performance
Shares and Retention Unit awards, Restricted Stock, health and
dental benefit continuation, Relocation Assistance and outplacement
service outlined above are benefits to which Employee is not
otherwise entitled pursuant to the employment relationship, the
termination of the employment relationship, or otherwise, and
Employee acknowledges and agrees that said payments and benefits
are intended to and do constitute adequate consideration for
Employee’s covenants and obligations set forth in the
Agreement.
I. Employee hereby
forever gives up, waives and releases any right to recall or
reinstatement by Employer or any of its affiliated companies, and
Employee d
