Exhibit 10(a)

AMENDED AND RESTATED CLIFFS

2007 INCENTIVE EQUITY PLAN

 

 

Table of Contents

 

         
 
  Page
 
   
ARTICLE 1 GENERAL PURPOSE OF PLAN; DEFINITIONS
  1
1.1 Name and Purpose
  1
1.2 Certain Definitions
  1
ARTICLE 2 ADMINISTRATION
  4
2.1 Authority and Duties of the Committee
  4
2.2 Delegation of Authority
  5
ARTICLE 3 SHARES SUBJECT TO PLAN
  5
3.1 Total Shares Limitation
  5
3.2 Other Limitations
  5
(a) ISO Limitations
  5
(b) Reduction of Limitation
  5
(c) Participant Overall Annual Limitation
  6
(d) Application of Limitations
  6
3.3 Awards Not Earned or Exercised
  6
3.4 Dilution and Other Adjustments
  6
ARTICLE 4 PARTICIPANTS
  7
4.1 Eligibility
  7
ARTICLE 5 STOCK OPTION AWARDS
  7
5.1 Stock Option Awards
  7
5.2 Terms and Conditions of Stock Option Awards
  7
(a) Exercise Price
  7
(b) Stock Option Term
  7
(c) Method of Exercise
  7
(d) Issuance of Shares
  8
(e) Form
  8
(f) Special Limitations on Stock Option Awards
  8
(g) Performance-Based Restrictions
  8
5.3 Termination of Awards Prior to Expiration
  8
(a) Termination by Death
  8
(b) Termination by Reason of Disability
  9
(c) Termination by Reason of Retirement
  9
(d) Termination for Cause
  9
(e) Other Termination
  9
ARTICLE 6 SPECIAL RULES APPLICABLE TO INCENTIVE STOCK OPTIONS
  9
6.1 Eligibility
  9
6.2 Special ISO Rules
  9
(a) Exercise Price
  9
(b) Term
  10
(c) Ten Percent Shareholder
  10
(d) Limitation on Grants
  10
(e) Non-Transferability
  10
(f) Termination of Employment
  10
(g) Fair Market Value
  10
6.3 Subject to Code Amendments
  10

 

1

         
 
  Page
 
   
ARTICLE 7 STOCK APPRECIATION RIGHTS
  10
7.1 SAR Award and Agreement
  10
7.2 SARs Granted in Conjunction with an Option
  11
(a) Term
  11
(b) Exercisability
  11
(c) Method of Exercise
  11
7.3 Independent SARs
  11
(a) Term
  11
(b) Exercisability
  11
(c) Method of Exercise
  11
(d) Early Termination Prior to Expiration
  12
(e) Grant Date Fair Market Value
  12
7.4 Other Terms and Conditions of SAR Grants; Performance-Based Restrictions
  12
7.5 Special Limitations on SAR Awards
  12
ARTICLE 8 RESTRICTED SHARE AND RESTRICTED SHARE UNIT AWARDS
  12
8.1 Restricted Share Awards and Agreements
  12
8.2 Terms and Conditions of Restricted Share Awards
  12
(a) Purchase Price
  12
(b) Restrictions
  12
(c) Performance-Based Restrictions
  13
(d) Delivery of Shares
  13
(e) Vesting of Shares
  13
(f) Forfeiture of Shares
  14
(g) Voting and Other Rights
  14
(h) Termination for Cause
  14
8.3 Restricted Share Unit Awards and Agreements
  14
8.4 Terms and Conditions of Restricted Share Unit Awards
  14
(a) Purchase Price
  14
(b) Restrictions
  14
(c) Performance-Based Restrictions
  15
(d) Voting and Other Rights
  15
(e) Vesting of Units
  15
(f) Lapse of Restrictions
  15
(g) Forfeiture of Restricted Share Units
  15
(h) Termination for Cause
  16
ARTICLE 9 DEFERRED SHARE AWARDS
  16
9.1 Deferred Share Awards and Agreements
  16
9.2 Terms and Conditions of Deferred Share Awards
  16
(a) Purchase Price
  16
(b) Restrictions
  16
(c) Deferral Period
  17
(d) Performance-Based Restrictions
  17
(e) Vesting of Deferred Shares
  17
(f) Forfeiture of Deferred Shares
  17
(g) Termination for Cause
  17
9.3 Special Limitations on Deferred Share Awards
  17
ARTICLE 10 PERFORMANCE SHARE AND PERFORMANCE UNIT AWARDS
  17
10.1 Performance Share Awards and Agreements
  17
10.2 Performance Unit Awards and Agreements
  18
10.3 Performance Objectives
  18

 

2

         
 
  Page
 
   
10.4 Adjustment of Performance Objectives
  19
10.5 Other Terms and Conditions of Performance Share and Performance Unit Awards
  19
(a) Delivery of Award
  19
(b) Vesting of Performance Shares and Performance Units
  19
(c) Voting and Other Rights
  20
(d) Performance-Based Compensation
  20
(e) Forfeiture of Performance Shares and Performance Units
  20
10.6 Special Limitations on Performance Share and Performance Unit Awards
  20
ARTICLE 11 TRANSFERS AND LEAVES OF ABSENCE
  20
11.1 Transfer of Participant
  20
11.2 Effect of Leaves of Absence
  20
ARTICLE 12 EFFECT OF CHANGE IN CONTROL
  21
12.1 Change in Control Defined
  21
12.2 Acceleration of Awards
  21
ARTICLE 13 TRANSFERABILITY OF AWARDS
  22
13.1 Awards Are Non-Transferable
  22
13.2 Inter-Vivos Exercise of Awards
  22
13.3 Limited Transferability of Certain Awards
  22
ARTICLE 14 AMENDMENT AND DISCONTINUATION
  22
14.1 Amendment or Discontinuation of this Plan
  22
14.2 Amendment of Awards
  22
14.3 Effect of Non-Approval of this Plan
  22
14.4 Term
  23
14.5 Effect of Termination
  23
ARTICLE 15 SHARE CERTIFICATES
  23
15.1 Delivery of Share Certificates
  23
15.2 Applicable Restrictions on Shares
  23
15.3 Book Entry
  23
ARTICLE 16 GENERAL PROVISIONS
  24
16.1 No Implied Rights to Awards or Employment
  24
16.2 Other Compensation Plans
  24
16.3 Withholding
  24
16.4 Foreign Employees
  24
16.5 Rule 16b-3 Compliance
  24
16.6 Code Section 162(m) Compliance
  24
16.7 Successors
  25
16.8 Severability
  25
16.9 Governing Law
  25
ARTICLE 17 EFFECTIVE DATE
  25
17.1 Effective Date
  25

 

AMENDED AND RESTATED CLIFFS
2007 INCENTIVE EQUITY PLAN

ARTICLE 1

GENERAL PURPOSE OF PLAN; DEFINITIONS

1.1 Name and Purpose. The name of this Plan is the Amended and Restated Cliffs
2007 Incentive Equity Plan. The purpose of the Cliffs 2007 Incentive Equity Plan
(the “Plan”) is to attract and retain employees for Cliffs Natural Resource Inc.
(f/k/a Cleveland-Cliffs Inc) and its Subsidiaries and to provide such persons
with incentives and rewards for performance.

1.2 Certain Definitions. Unless the context otherwise indicates, the following
words used herein shall have the following meanings whenever used in this Plan:

(a) The word “Affiliate” means any corporation, partnership, joint venture or
other entity, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company as
determined by the Board of Directors in its discretion.

(b) The word “Award” means any grant under this Plan of a Stock Option, Stock
Appreciation Right, Restricted Shares, Restricted Share Units, Deferred Shares,
Performance Shares, or Performance Units to any Participant.

(c) The words “Board of Directors” mean the Board of Directors of the Company,
as constituted from time to time.

(d) The word “Cause” means that, prior to any termination of employment, the
Participant shall have committed: (i) and been convicted of a criminal violation
involving fraud, embezzlement or theft in connection with his duties or in the
course of his employment with the Company or any Subsidiary; (ii) intentional
wrongful damage to property of the Company or any Subsidiary; (iii) intentional
wrongful disclosure of secret processes or confidential information of the
Company or any Subsidiary; or (iv) intentional wrongful engagement in any
competitive activity; and any such act shall have been demonstrably and
materially harmful to the Company. For purposes of this Agreement, no act or
failure to act on the part of the Participant shall be deemed “intentional” if
it was due primarily to an error in judgment or negligence, but shall be deemed
“intentional” only if done or omitted to be done by the Participant not in good
faith and without reasonable belief that the Participant’s action or omission
was in the best interest of the Company.

(e) The word “Code” means the Internal Revenue Code of 1986, as amended, and any
lawful regulations or pronouncements promulgated thereunder. Whenever reference
is made to a specific Code section, such reference shall be deemed to be a
reference to any successor Code section or sections with the same or similar
purpose.

(f) The word “Committee” means the entity administering this Plan as provided in
Section 2.1 hereof or, if none has been appointed, then the Board of Directors
as a whole.

(g) The word “Company” Cliffs Natural Resource Inc. (f/k/a Cleveland-Cliffs
Inc), a corporation organized under the laws of the State of Ohio and any
successor corporation or business organization which shall assume the duties and
obligations of Cliffs Natural Resource Inc. (f/k/a Cleveland-Cliffs Inc) under
this Plan.

(h) The words “Date of Grant” mean the date on which the Committee, or the Chief
Executive Officer pursuant to the delegated authority of the Committee, approves
an Award or a future date that the Committee, or the Chief Executive Officer,
designates at the time of the Award.

(i) The words “Deferred Shares” mean an Award which may result in the delivery
or sale to a Participant at a future date of Shares upon the completion of a
specified period of service or the satisfaction of specified performance goals.

 

3

(j) The word “Director” means a member of the Board of Directors.

(k) The word “Disability” means a 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 and which results in the
Participant: (i) being unable to engage in any substantial gainful activity; or
(ii) receiving income replacement benefits for a period of not less than three
months under an accident or health plan covering employees of the Company.

(l) The words “Early Retirement” mean either (i) a Participant’s retirement from
active employment with the Company or an Affiliate on and after the attainment
of age 55 and 15 years of Continuous Service or (ii) a Participant’s retirement
from active employment with the Company or an Affiliate on and after the
attainment has at least 30 years of Continuous Service. Continuous Service shall
be determined pursuant to Part A of the Pension Plan for Employees of Cliffs
Natural Resource Inc. (f/k/a Cleveland-Cliffs Inc) and Its Associated Employers.

(m) The acronym “ERISA” means the Employee Retirement Income Security Act of
1974, as amended and any lawful regulations or pronouncements promulgated
thereunder. Whenever reference is made to a specific ERISA Section, such
reference shall be deemed to be a reference to any successor ERISA Section or
Sections with the same or similar purpose.

(n) The words “Exchange Act” mean the Securities Exchange Act of 1934, as
amended, and any lawful regulations or pronouncements promulgated thereunder.
Whenever reference is made to a specific Exchange Act Section, such reference
shall be deemed to be a reference to any successor Exchange Act Section or
Sections with the same or similar purpose.

(o) The words “Exercise Price” mean the purchase price of a Share covered by a
Stock Option.

(p) The words “Fair Market Value” mean the last closing price of a Share as
reported on the New York Stock Exchange, or, if applicable, on another national
securities exchange on which the Shares are principally traded, on the date for
which the determination of fair market value is made, or, if there are no sales
of Shares on such date, then on the most recent immediately preceding date on
which there were any sales of Shares on such principal trading exchange. If the
Shares are not or cease to be traded on the New York Stock Exchange or another
national securities exchange, the “Fair Market Value” of Shares shall be
determined in the manner prescribed by the Committee. Notwithstanding the
foregoing, as of any date, the “Fair Market Value” of Shares shall be determined
in a manner consistent with Section 409A of the Code and the guidance then
existing thereunder.

(q) The words “Incentive Stock Option” and the acronym “ISO” mean a Stock Option
that is clearly identified as such and which meets the requirements of
Section 422 of the Code, or any successor provision, and therefore qualifies for
favorable tax treatment.

(r) The words “Non-Qualified Stock Option” and the acronym “NQSO” mean a Stock
Option that: (i) is governed by Section 83 of the Code; and (ii) does not meet
the requirements of Section 422 of the Code.

(s) The words “Normal Retirement” mean retirement from active employment with
the Company or an Affiliate on or after the age of 65.

(t) The words “Outside Director” mean a Director who meets the definitions of
the terms “outside director” set forth in Section 162(m) of the Code,
“independent director” set forth in the New York Stock Exchange, Inc. rules, and
“non-employee director” set forth in Rule 16b-3 under the Exchange Act, or any
successor definitions adopted by the Internal Revenue Service, the New York
Stock Exchange, Inc. and Securities and Exchange Commission, respectively, and
similar requirements under any other applicable laws and regulations.

(u) The word “Participant” means each employee who has been selected to
participate in this Plan in accordance with Section 4.1 hereof.

 

4

(v) The words “Performance Period” mean the period described in Section 10.3
hereof.

(w) The words “Performance Shares” mean an Award which may result in the
delivery to a Participant at a future date of Shares or cash, or both, upon the
satisfaction of specified performance goals at the end of a specified
Performance Period.

(x) The words “Performance Units” mean an Award which may result in the payment
of cash to a Participant at a future date or the delivery to a Participant at a
future date of Shares, or a combination of cash and Shares, upon the
satisfaction of specified performance goals at the end of a specified
Performance Period.

(y) The word “Plan” means this Amended and Restated Cliffs 2007 Incentive Equity
Plan, as amended from time to time.

(z) The acronym “QDRO” means a qualified domestic relations order as defined by
the Code.

(aa) The word “Retirement” means Normal Retirement or Early Retirement.

(bb) The words “Restricted Shares” mean an Award of Shares to a Participant at
no cost or at a purchase price which may be below Fair Market Value but which
are subject to forfeiture and/or restrictions on sale or transfer for a
specified restriction period.

(cc) The words “Restricted Share Units” mean an Award which may result in the
delivery at no cost or sale at a purchase price which may be below Fair Market
Value to a Participant at a future date of Shares but which are subject to
forfeiture and/or restrictions on sale or transfer.

(dd) The words “Retention Units” mean a type of Restricted Share Unit that is
typically paid in cash and which does not have any performance goals.

(ee) The word “Share” or “Shares” means one or more Common Shares, par value,
$.25 per share, of the Company.

(ff) The word “Shareholder” means an individual or entity that owns one or more
Shares.

(gg) The words “Stock Appreciation Right” and the acronym “SAR” mean an Award
which may result in the delivery or sale to a Participant at a future date of
cash or Shares, or both, upon the completion of a specified period of service or
the satisfaction of specified performance goals.

(hh) The words “Stock Option” mean any right to purchase a specified number of
Shares at a specified price which is granted pursuant to Article 5 herein and
may be an Incentive Stock Option or a Non-Qualified Stock Option.

(ii) The words “Stock Power” mean a power of attorney executed by a Participant
and delivered to the Company which authorizes the Company to transfer ownership
of Restricted Shares, Performance Shares or Shares from the Participant to the
Company or a third party.

(jj) The word “Subsidiary” means any corporation which qualifies as a
“subsidiary corporation” of the Company under Section 424(f) of the Code.

(kk) The word “Term” means the period that this Plan will remain in effect which
will be for six years after adoption of this Plan by the Board of Directors.

(ll) The word “Vested” means that the time has been reached, with respect to
Stock Options, when the option to purchase Shares first becomes exercisable;
with respect to Stock Appreciation Rights, when the Stock Appreciation Right
first becomes exercisable for payment; with respect to Restricted Shares, when
the Shares are no longer subject to forfeiture and restrictions on
transferability; with respect to Deferred Shares when the Shares are deliverable
to the Participant; with respect to Restricted Share Units and Performance
Shares, when the Shares or Units are no longer subject to forfeiture and are
convertible to Shares; and with respect to Performance Units, when the Units are
no longer subject to forfeiture and are convertible to Shares or cash. The words
“Vest” and “Vesting” have meanings correlative to the foregoing.

 

5

ARTICLE 2

ADMINISTRATION

2.1 Authority and Duties of the Committee.

(a) The Plan shall be administered by a Committee of not less than three
Directors who are appointed by the Board of Directors and serve at its pleasure.
Unless otherwise determined by the Board of Directors, the Compensation and
Organization Committee shall serve as the Committee, and all of the members of
the Committee shall be Outside Directors. Notwithstanding the requirement that
the Committee consist exclusively of Outside Directors, no action or
determination by the Committee or an individual considered to be an Outside
Director shall be deemed void because a member of the Committee or such
individual fails to satisfy the requirements for being an Outside Director,
except to the extent required by applicable law.

(b) The Committee has the power and authority to grant Awards pursuant to the
terms of this Plan to officers, mine managers and other key employees of the
Company or its Affiliates.

(c) In particular, the Committee has the authority, subject to any limitations
specifically set forth in this Plan, to:

(i) select the officers, mine managers and other key employees to whom Awards
are granted;

(ii) determine the types of Awards granted and the timing of such Awards;

(iii) determine the number of Shares to be covered by each Award granted
hereunder;

(iv) determine whether an Award is, or is intended to be, “performance-based
compensation” within the meaning of Section 162(m) of the Code;

(v) determine the other terms and conditions, not inconsistent with the terms of
this Plan and any operative employment or other agreement, of any Award granted
hereunder; such terms and conditions include, but are not limited to, the
Exercise Price, the time or times when Stock Options or Stock Appreciation
Rights may be exercised (which may be based on performance objectives), any
Vesting, acceleration or waiver of forfeiture restrictions, any performance
criteria (including any performance criteria as described in
Section 162(m)(4)(C) of the Code) applicable to an Award, and any restriction or
limitation regarding any Stock Option or Stock Appreciation Rights or the Shares
relating thereto, based in each case on such factors as the Committee, in its
sole discretion, shall determine;

(vi) determine and certify whether any conditions or objectives related to
Awards have been met, including any such determination required for compliance
with Section 162(m) of the Code;

(vii) subsequently modify or waive any terms and conditions of Awards, not
inconsistent with the terms of this Plan and any operative employment or other
agreement provided that any such modification or waiver shall not have the
effect of increasing the payment to the Participant under an Award which is
intended to be a performance-based Award under Section 162(m);

(viii) determine whether, to what extent and under what circumstances, Shares
and other amounts payable with respect to any Award are deferred either
automatically or at the election of the Participant;

(ix) adopt, alter and repeal such administrative rules, guidelines and practices
governing this Plan as it deems advisable from time to time;

(x) promulgate such administrative forms as they from time to time deem
necessary or appropriate for administration of the Plan;

 

6

(xi) construe, interpret and implement the terms and provisions of this Plan,
any Award and any related agreements;

(xii) correct any defect, supply any omission and reconcile any inconsistency in
or between the Plan, any Award and any related agreements; and

(xiii) otherwise supervise the administration of this Plan.

(d) All decisions made by the Committee pursuant to the provisions of this Plan
are final and binding on all persons, including the Company, its Shareholders
and Participants, but may be made by their terms subject to ratification or
approval by the Board of Directors, another committee of the Board of Directors
or the Shareholders. No member of the Committee shall be liable to any person
for any action taken or determination made in good faith.

2.2 Delegation of Authority. The Committee may delegate its powers and duties
under this Plan to the Chief Executive Officer of the Company, subject to
applicable law and such terms, conditions and limitations as the Committee may
establish in its sole discretion; provided, however, that the Committee may not
delegate its powers and duties under this Plan with regard to Awards to the
Company’s executive officers or any Participant who is a “covered employee” as
defined in Section 162(m) of the Code. The Company shall furnish the Committee
with such clerical and other assistance as is necessary for the performance of
the Committee’s duties under this Plan. In addition, the Committee may delegate
ministerial duties to any other person or persons, and it may employ attorneys,
consultants, accountants or other professional advisers.

ARTICLE 3

SHARES SUBJECT TO PLAN

3.1 Total Shares Limitation. Subject to the provisions of this Article 3, the
maximum number of Shares that may be issued pursuant to Awards granted under
this Plan is 2,000,000, which may be newly-issued Shares or Shares that have
been reacquired in the open market or in private transactions. The 2,000,000
maximum Share limitation set forth in the preceding sentence, which became
4,000,000 as a result of the 2:1 stock split in 2008, is amended to become
11,000,000, applicable to Awards granted on or after January 1, 2010, but
effective only if and when Shareholder approval of this amendment is obtained.

3.2 Other Limitations.

(a) ISO Limitations. The maximum number of Shares available with respect to all
Stock Options granted under this Plan that may be Incentive Stock Options is
2,000,000 Shares. The 2,000,000 maximum Share limitation set forth in the
preceding sentence, which became 4,000,000 as a result of the 2:1 stock split in
2008, is amended to become 11,000,000, applicable to Awards granted on or after
January 1, 2010, but effective only if and when Shareholder approval of this
amendment is obtained.

(b) Reduction of Limitation. For purposes of Section 3.1, each Share issued or
transferred pursuant to an Award other than a Stock Option or a Stock
Appreciation Right shall reduce the number of Shares available for issuance
under the Plan by two Shares. Each Share issued or transferred pursuant to a
Stock Option or a Stock Appreciation Right shall reduce the number of Shares
available for issuance under the Plan by one Share. If Stock Options and Stock
Appreciation Rights are issued in tandem so that only one can be exercised, the
number of Shares available for issuance under the Plan shall be reduced by one
Share for each tandem pair of Stock Options and Stock Appreciation Rights.

 

7

(c) Participant Overall Annual Limitation. The aggregate number of Shares
underlying Awards granted under this Plan to any one Participant in any fiscal
year, regardless of whether such Awards are thereafter canceled, forfeited or
terminated, shall not exceed the number of Shares having a Fair Market Value on
the Date of Grant equal to $5,000,000. The $5,000,000 annual limitation set
forth in the preceding sentence is amended to become an annual limitation of
500,000 Shares (without regard to any particular dollar amount), applicable to
Awards granted on or after January 1, 2010, but effective only if and when
Shareholder approval of this amendment is obtained. The foregoing annual
limitation is intended to include the grant of all Awards, including but not
limited to, Awards representing “performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

(d) Application of Limitations. The foregoing limitations shall be applied based
upon the assumption that the maximum number of Shares shall be earned under any
performance based Award.

3.3 Awards Not Earned or Exercised. In the event any outstanding Award, or
portion thereof, expires, or is terminated, canceled or forfeited, the Shares
that would otherwise be issuable with respect to the unexercised portion of such
expired, terminated, canceled or forfeited Award shall be available for
subsequent Awards under this Plan.

Any Shares subject to any Award that are withheld or otherwise not issued upon
exercise of any Award to satisfy the Participant’s withholding obligations or in
payment of any subscription price or the Exercise Price, and Shares subject to
an Award (or any portion of an Award) that is settled in cash in lieu of
settlement in Shares will reduce the number of Shares available for grant under
the limitations in Sections 3.1 and 3.2 as if the full Award had been issued in
Shares.

3.4 Dilution and Other Adjustments. In the event that there is a
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, or other similar corporate
transaction or event which affects the number of Shares of the Company
outstanding, the (i) the number and type of Shares (or other securities or other
property) which thereafter may be made the subject of Awards, (ii) the number
and type of Shares (or other securities or other property) subject to
outstanding Awards, (iii) the limitations set forth in Sections 3.1 and 3.2
above and (iv) the purchase price, Exercise Price or any performance objective
with respect to any Award shall be appropriately adjusted in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under this Plan; provided, however, that the number of Shares or
other securities covered by any Award or to which such Award relates shall
always be a whole number.

In addition, if the Committee determines that any dividend or other distribution
(whether in the form of cash, Shares, other securities or other property),
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under this Plan, then the Committee may, in such manner as it
deems equitable, make the adjustments described in the preceding paragraph;
provided, however, that the number of Shares or other securities covered by any
Award or to which such Award relates is always a whole number.

Notwithstanding the foregoing, the adjustments described in this Section 3.4
shall be made in compliance with: (i) Sections 422 and 424 of the Code with
respect to ISOs; (ii) Section 162(m) of the Code with respect to Performance
Share Awards unless specifically determined otherwise by the Committee; and
(iii) Section 409A of the Code, to the extent the Committee determines it is
necessary to avoid its application or avoid adverse tax consequences thereunder.

 

8

ARTICLE 4

PARTICIPANTS

4.1 Eligibility. Officers, mine managers and other key employees of the Company
or any of its Affiliates may be eligible to participate in this Plan. The
Participants shall be selected from time to time by the Committee in its sole
discretion, or, with respect to employees other than executive officers or
Participants who are “covered employees” as defined in Section 162(m) of the
Code, by the Chief Executive Officer in his sole discretion with proper
delegation from the Committee.

ARTICLE 5

STOCK OPTION AWARDS

5.1 Stock Option Awards. Each Stock Option granted under this Plan (or
delegation of authority to the Chief Executive Officer to grant Stock Options)
will be evidenced by minutes of a meeting, or by a unanimous written consent
without a meeting, of the Committee and by a written agreement dated as of the
Date of Grant and executed by the Company and by the Participant.

5.2 Terms and Conditions of Stock Option Awards. Stock Options granted under
this Plan are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies with respect to
exercisability and/or with respect to the Shares acquired upon exercise, not
inconsistent with the terms of this Plan and any operative employment or other
agreement, as the Committee deems desirable:

(a) Exercise Price. The Exercise Price fixed at the time of grant will not be
less than 100% of the Fair Market Value of the Shares as of the Date of Grant.
If a variable Exercise Price is specified at the time of grant, the Exercise
Price may vary pursuant to a formula or other method established by the
Committee which provides a floor not less than Fair Market Value as of the Date
of Grant. Except as otherwise provided in Section 3.4 hereof, no subsequent
amendment of an outstanding Stock Option may reduce the Exercise Price to less
than 100% of the Fair Market Value of the Shares as of the Date of Grant either
by lowering the Exercise Price or by canceling the outstanding Stock Option and
granting a replacement option with a lower Exercise Price.

(b) Stock Option Term. Any unexercised portion of a Stock Option granted
hereunder shall expire at the end of the stated term of the Stock Option. The
Committee shall determine the term of each Stock Option at the time of grant,
which term shall not exceed ten years from the Date of Grant. The Committee may
extend the term of a Stock Option, in its discretion, but not beyond the date
immediately prior to the tenth anniversary of the original Date of Grant. If a
definite term is not specified by the Committee at the time of grant, then the
term is deemed to be ten years.

(c) Method of Exercise. Vested portions of any Stock Option may be exercised in
whole or in part at any time during the term of the Stock Option by giving
written notice of exercise to the Company specifying the number of Shares to be
purchased. The notice must be given by or on behalf of a person entitled to
exercise the Stock Option, accompanied by payment in full of the Exercise Price,
along with any required tax withholding or payment of cash pursuant to
Section 16.3 hereof. Subject to the approval of the Committee, the Exercise
Price may be paid:

(i) in cash in any manner satisfactory to the Committee;

(ii) by tendering (by either actual delivery of Shares or by attestation)
previously-owned Shares having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price applicable to such Stock Option exercise,
and, with respect to the exercise of NQSOs, including Restricted Shares;

(iii) by a combination of cash and Shares;

 

9

(iv) to the extent permitted by applicable law, from the proceeds of sale
through a bank or a broker on the date of exercise of some or all of the Shares
to which the exercise relates in whole or in part by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities broker
to sell Shares and delivery of all or a part of the sales proceeds to the
Company in payment of the Exercise Price and, if applicable, the amount
necessary to satisfy the Company’s withholding obligations at the minimum
statutory withholding rates, including but not limited to, U.S. Federal and
state income taxes, payroll taxes and foreign taxes, if applicable; or

(v) by another method permitted by law which assures full and immediate payment
of the Exercise Price.

The Committee may withhold its approval for any method of payment for any
reason, in its sole discretion, including but not limited to concerns that the
proposed method of payment will result in adverse financial accounting treatment
or adverse tax treatment for the Company.

If the Exercise Price of a NQSO is paid by tendering Restricted Shares, then the
Shares received upon the exercise will contain identical restrictions as the
Restricted Shares so tendered. Except as otherwise provided by law and in the
Committee’s sole discretion, required tax withholding may be paid only by cash
or through a same day sale transaction.

(d) Issuance of Shares. The Company will issue or cause to be issued such Shares
promptly upon exercise of the Option without any restrictions other than those
described in Section 15.2 hereof. No Shares will be issued until full payment
has been made. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
the share certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a Shareholder will exist with respect to the
Shares, notwithstanding the exercise of the Option.

(e) Form. Unless the grant of a Stock Option is designated at the time of grant
as an ISO, it is deemed to be an NQSO. ISOs are also subject to the terms and
conditions stated in Article 6 hereof.

(f) Special Limitations on Stock Option Awards. Unless an Award agreement
approved by the Committee provides otherwise, Stock Options awarded under this
Plan are intended to meet the requirements for exclusion from coverage under
Section 409A of the Code and all Stock Option Awards shall be construed and
administered accordingly.

(g) Performance-Based Restrictions. The Committee may, in its sole discretion,
grant Stock Options that Vest only upon the attainment of specified performance
objectives. In such case, the provisions of Sections 10.3, 10.4 and 10.5(d) will
apply and only the enumerated performance objectives stated in Section 10.3 will
apply.

5.3 Termination of Awards Prior to Expiration. Unless otherwise provided in an
employment or other agreement entered into between the optionee and the Company
and approved by the Committee, either before or after the Date of Grant, or
otherwise specified at or after the time of grant, and subject to Article 6
hereof with respect to ISOs, the following early termination provisions apply to
all Stock Options:

(a) Termination by Death. If an optionee’s employment with the Company or its
Affiliates terminates by reason of his or her death, all Stock Options held by
such optionee will immediately become Vested, but thereafter may only be
exercised (by the optionee’s designated beneficiary or, if there is no
designated beneficiary, by the legal representative of the optionee’s estate, or
by the legatee or heir of the optionee pursuant to a will or the laws of descent
and distribution) for a period of one year (or such other period as the
Committee may specify at or after the time of grant) from the date of such
death, or until the expiration of the original term of the Stock Option,
whichever period is the shorter.

 

10

(b) Termination by Reason of Disability. If an optionee’s employment with the
Company or its Affiliates terminates by reason of his or her Disability, all
Stock Options held by such optionee will immediately become Vested, but
thereafter may only be exercised for a period of one year (or such other period
as the Committee may specify at or after the time of grant) from the date of
such termination of employment, or until the expiration of the original term of
the Stock Option, whichever period is the shorter. If the optionee dies within
such one-year period (or such other period as applicable), any unexercised Stock
Option held by such optionee will thereafter be exercisable by the optionee’s
designated beneficiary, or if no beneficiary is designated by the optionee, then
by the legal representative of the optionee’s estate, or by the legatee or heir
of the optionee pursuant to a will or the laws of descent and distribution, for
the greater of the remainder of the one-year period (or other period as
applicable) or for a period of 12 months from the date of such death, but in no
event shall any portion of the Stock Option be exercisable after its original
stated expiration date.

(c) Termination by Reason of Retirement. If an optionee’s employment with the
Company or its Affiliates terminates by reason of his or her Retirement, the
Stock Options held by such optionee which were Vested immediately prior to his
Retirement may be exercised for a period of one year (or such other period as
the Committee may specify at or after the time of grant) from the date of such
Retirement, or until the expiration of the original term of the Stock Option,
whichever period is the shorter. If the optionee dies within such one-year
period (or such other period as applicable), any unexercised Stock Option held
by such optionee will thereafter be exercisable by the optionee’s designated
beneficiary, or if no beneficiary is designated by the optionee, then by the
legal representative of the optionee’s estate, or by the legatee or heir of the
optionee pursuant to a will or the laws of descent and distribution, for the
greater of the remainder of the one-year period (or such other period as
applicable) or for a period of 12 months from the date of such death, but in no
event shall any portion of the Stock Option be exercisable after its original
stated expiration date. Stock Options which were not Vested on the optionee’s
date of Retirement will be forfeited as of such date.

(d) Termination for Cause. If an optionee’s employment with the Company or its
Affiliates is terminated by the Company for Cause, all Stock Options (or
portions thereof) which have not been exercised, whether Vested or not, are
automatically forfeited immediately upon termination.

(e) Other Termination. If an optionee’s employment with the Company or its
Affiliates terminates, voluntarily or involuntarily, for any reason other than
death, Disability, Retirement or for Cause, any Vested portions of Stock Options
held by such optionee at the time of termination may be exercised by the
optionee for a period of three months (or such other period as the Committee may
specify at or after the time of grant) from the date of such termination or
until the expiration of the original term of the Stock Option, whichever period
is the shorter. No portion of any Stock Option which is not Vested at the time
of such termination will thereafter become Vested.

ARTICLE 6

SPECIAL RULES APPLICABLE TO INCENTIVE STOCK OPTIONS

6.1 Eligibility. Notwithstanding any other provision of this Plan to the
contrary, an ISO may only be granted to full or part-time employees (including
officers and Directors who are also employees) of the Company or a Subsidiary.

6.2 Special ISO Rules.

(a) Exercise Price. The Exercise Price fixed at the time of grant will not be
less than 100% of the Fair Market Value of the Shares as of the Date of Grant
(110% of the Fair Market Value of the Shares if Section 6.2(c) applies. If a
variable Exercise Price is specified at the time of grant, the Exercise Price
may vary pursuant to a formula or other method established by the Committee

 

11

which provides a floor not less than 100% or 110% Fair Market Value as of the
Date of Grant, as the case may be. Except as otherwise provided in Section 3.4
hereof, no subsequent amendment of an outstanding Stock Option may reduce the
Exercise Price to less than 100% or 110% of the Fair Market Value of the Shares
as of the Date of Grant, whichever is applicable.

(b) Term. No ISO may be exercisable on or after the tenth anniversary of the
Date of Grant, and no ISO may be granted under this Plan on or after the tenth
anniversary of the effective date of this Plan. (See Section 17.1 hereof.)

(c) Ten Percent Shareholder. No optionee may receive an ISO under this Plan if
such optionee, at the time the Award is granted, owns (after application of the
rules contained in Section 424(d) of the Code) equity securities possessing more
than 10% of the total combined voting power of all classes of equity securities
of the Company or any Subsidiary, unless (i) the Exercise Price for such ISO is
at least 110% of the Fair Market Value of the Shares as of the Date of Grant and
(ii) such ISO is not exercisable on or after the fifth anniversary of the Date
of Grant.

(d) Limitation on Grants. The aggregate Fair Market Value (determined with
respect to each ISO at the time such ISO is granted) of the Shares with respect
to which ISOs are exercisable for the first time by an optionee during any
calendar year (under this Plan or any other plan adopted by the Company or its
Subsidiary) shall not exceed $100,000. If such aggregate Fair Market Value shall
exceed $100,000, such number of ISOs as shall have an aggregate Fair Market
Value equal to the amount in excess of $100,000 shall be treated as NQSOs.

(e) Non-Transferability. Notwithstanding any other provision herein to the
contrary, no ISO granted hereunder (and, if applicable, related Stock
Appreciation Right) may be transferred except by upon death to the Participant’s
designated beneficiary, or if no beneficiary is designated by the Participant,
then by will or by the laws of descent and distribution, nor may such ISO (or
related Stock Appreciation Right) be exercisable during an optionee’s lifetime
other than by him (or his or her guardian or legal representative to the extent
permitted by applicable law).

(f) Termination of Employment. No ISO may be exercised more than three months
following termination of employment for any reason (including Retirement) other
than death or Disability, nor more than one year following termination of
employment for the reason of death or disability (as defined in Section 22(e)(3)
of the Code), or such option will no longer qualify as an ISO and shall
thereafter be, and receive the tax treatment applicable to, an NQSO. For this
purpose, a termination of employment is cessation of employment with the Company
or a Subsidiary.

(g) Fair Market Value. For purposes of any ISO granted hereunder (or, if
applicable, related Stock Appreciation Right), the Fair Market Value of Shares
shall be determined in the manner required by Section 422 of the Code.

6.3 Subject to Code Amendments. The foregoing limitations are designed to comply
with the requirements of Section 422 of the Code and shall be automatically
amended or modified to comply with amendments or modifications to Section 422 or
any successor provisions. Any ISO which fails to comply with Section 422 of the
Code is automatically treated as a NQSO appropriately granted under this Plan
provided it otherwise meets the Plan’s requirements for NQSOs.

ARTICLE 7

STOCK APPRECIATION RIGHTS

7.1 SAR Award and Agreement. Stock Appreciation Rights may be granted under this
Plan, either independently or in conjunction with the grant of a Stock Option.
Each SAR granted under this Plan (or delegation of authority to the Chief
Executive Officer to grant SARs) will be evidenced by minutes of a meeting, or
by a unanimous written consent without a meeting, of the Committee and by a
written agreement dated as of the Date of Grant and executed by the Company and
by the Participant.

 

12

7.2 SARs Granted in Conjunction with an Option. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted under this
Plan, either at the same time or after the grant of the Stock Option, and will
be subject to the following terms and conditions:

(a) Term. Each Stock Appreciation Right, or applicable portion thereof, granted
with respect to a given Stock Option or portion thereof shall terminate and
shall no longer be exercisable upon the termination or exercise of the related
Stock Option, or applicable portion thereof.

(b) Exercisability. A Stock Appreciation Right is exercisable only at such time
or times and to the extent that the Stock Option to which it relates is Vested
and exercisable in accordance with the provisions of Article 5 hereof or
otherwise as the Committee may determine at or after the time of grant.

(c) Method of Exercise. A Stock Appreciation Right may be exercised by the
surrender of the applicable portion of the related Stock Option. Stock Options
which have been so surrendered, in whole or in part, are no longer exercisable
to the extent the related Stock Appreciation Rights have been exercised and are
deemed to have been exercised for the purpose of the limitation set forth in
Article 3 hereof on the number of Shares to be issued under this Plan. Upon the
exercise of a Stock Appreciation Right, subject to satisfaction of tax
withholding or payment of cash requirements pursuant to Section 16.3, the holder
of the Stock Appreciation Right is entitled to receive up to, but not more than,
an amount in cash or Shares, or a combination of cash and Shares, equal in value
to the excess of the Fair Market Value of one Share over the Exercise Price per
Share specified in the related Stock Option, multiplied by the number of Shares
in respect of which the Stock Appreciation Right is exercised, with the
Committee having the right in its discretion to determine the form of payment.
At any time the Exercise Price per Share of the related Stock Option does not
exceed the Fair Market Value of one Share, the holder of the Stock Appreciation
Right shall not be permitted to exercise such right.

7.3 Independent SARs. Stock Appreciation Rights may be granted without related
Stock Options, and independent Stock Appreciation Rights will be subject to the
following terms and conditions:

(a) Term. Any unexercised portion of an independent Stock Appreciation Right
granted hereunder shall expire at the end of the stated term of the Stock
Appreciation Right. The Committee shall determine the term of each Stock
Appreciation Right at the time of grant, which term shall not exceed ten years
from the Date of Grant. The Committee may extend the term of a Stock
Appreciation Right, in its discretion, but not beyond the date immediately prior
to the tenth anniversary of the original Date of Grant. If a definite term is
not specified by the Committee at the time of grant, then the term is deemed to
be ten years.

(b) Exercisability. A Stock Appreciation Right is exercisable, in whole or in
part, at such time or times as determined by the Committee at or after the time
of grant.

(c) Method of Exercise. A Stock Appreciation Right may be exercised in whole or
in part during the term by giving written notice of exercise to the Company
specifying the number of Shares in respect of which the Stock Appreciation Right
is being exercised. The notice must be given by or on behalf of a person
entitled to exercise the Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, subject to satisfaction of tax withholding or payment of
cash requirements pursuant to Section 16.3, the holder of the Stock Appreciation
Right is entitled to receive an amount in cash or Shares, or a combination of
cash and Shares, equal in value to the excess of the Fair Market Value of a
Share on the exercise date over the Fair Market Value of a Share on the Date of
Grant multiplied by the number of Stock Appreciation Rights being exercised,
with the Committee having the right in its discretion to determine the form of
payment. At any time the Fair Market Value of a Share on a proposed exercise
date does not exceed the Fair Market Value of a Share on the Date of Grant, the
holder of the Stock Appreciation Right shall not be permitted to exercise such
right.

 

13

(d) Early Termination Prior to Expiration. Unless otherwise provided in an
employment or other agreement entered into between the holder of the Stock
Appreciation Right and the Company and approved by the Committee, either before
or after the Date of Grant, or otherwise specified at or after the Date of
Grant, the early termination provisions set forth in Section 5.3 as applied to
Non-Qualified Stock Options will apply to independent Stock Appreciation Rights.

(e) Grant Date Fair Market Value. Except as otherwise provided in Section 3.4
hereof, no subsequent amendment of an outstanding SAR may reduce the Grant Date
Fair Market Value either by lowering the stated Grant Date Fair Market Value or
by canceling the outstanding SAR and granting a replacement SAR with a lower
Grant Date Fair Market Value.

7.4 Other Terms and Conditions of SAR Grants; Performance-Based Restrictions.
Stock Appreciation Rights are subject to such other terms and conditions, not
inconsistent with the provisions of this Plan and any operative employment or
other agreement, as are determined from time to time by the Committee.
Notwithstanding the foregoing, the Committee may, in its sole discretion, grant
SAR Awards only upon the attainment of specified performance objectives. In such
case, the provisions of Sections 10.3, 10.4 and 10.5(d) will apply and only the
enumerated performance objectives stated in Section 10.3 will apply.

7.5 Special Limitations on SAR Awards. Unless an Award agreement approved by the
Committee provides otherwise, Stock Appreciation Rights awarded under this Plan
are intended to meet the requirements for exclusion from coverage under
Section 409A of the Code and all Stock Appreciation Rights Awards shall be
construed and administered accordingly.

ARTICLE 8

RESTRICTED SHARE AND RESTRICTED SHARE UNIT AWARDS

8.1 Restricted Share Awards and Agreements. Restricted Share Awards consist of
Shares which are issued by the Company to a Participant at no cost or at a
purchase price determined by the Committee which may be below their Fair Market
Value but which are subject to forfeiture and/or restrictions on their sale or
other transfer by the Participant. Each Restricted Share Award granted under
this Plan (or delegation of authority to the Chief Executive Officer to make
Restricted Share Awards) will be evidenced by minutes of a meeting, or by a
unanimous written consent without a meeting, of the Committee and by a written
agreement dated as of the Date of Grant and executed by the Company and by the
Participant. The timing of Restricted Share Awards and the number of Shares to
be issued (subject to Article 3 hereof) are to be determined by the Committee in
its discretion. By accepting a grant of Restricted Shares, the Participant
agrees to remit to the Company when due any required tax withholding or payment
of cash as provided in Section 16.3 hereof.

8.2 Terms and Conditions of Restricted Share Awards. Restricted Shares granted
under this Plan are subject to the following terms and conditions, which, except
as otherwise provided herein, need not be the same for each Participant, and may
contain such additional terms, conditions, restrictions and contingencies not
inconsistent with the terms of this Plan and any operative employment or other
agreement, as the Committee deems desirable:

(a) Purchase Price. The Committee shall determine the prices, if any, at which
Restricted Shares are to be issued to a Participant, which may vary from time to
time and among Participants and which may be below the Fair Market Value of such
Shares at the Date of Grant.

(b) Restrictions. All Restricted Shares issued under this Plan will be subject
to such restrictions as the Committee may determine, which may include, without
limitation, the following:

(i) a prohibition against the sale, transfer, pledge or other encumbrance of the
Restricted Shares, such prohibition to lapse at such time or times as the
Committee determines (whether

 

14

in installments, at the time of the death, Disability or Retirement of the
holder of such Shares, or otherwise, but subject to the Change in Control
provisions in Article 12);

(ii) a requirement that the Participant forfeit such Restricted Shares in the
event of termination of the Participant’s employment with the Company or its
Affiliates to the extent not otherwise Vested under this Section 8.2;

(iii) a prohibition against employment or retention of the Participant by any
competitor of the Company or its Affiliates, or against dissemination by the
Participant of any secret or confidential information belonging to the Company
or an Affiliate;

(iv) any applicable requirements arising under the Securities Act of 1933, as
amended, other securities laws, the rules and regulations of the New York Stock
Exchange or any other stock exchange or transaction reporting system upon which
such Restricted Shares are then listed or quoted and any state laws, rules and
regulations, including “blue sky” laws; and

(v) such additional restrictions as are required to avoid adverse tax
consequences under Section 409A of the Code.

The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.

(c) Performance-Based Restrictions. The Committee may, in its sole discretion,
provide restrictions that lapse upon the attainment of specified performance
objectives. In such case, the provisions of Sections 10.3, 10.4 and 10.5(d) will
apply and only the enumerated performance objectives stated in Section 10.3 will
apply.

(d) Delivery of Shares. Restricted Shares will be registered in the name of the
Participant and deposited, together with a Stock Power, with the Company. Each
certificate will bear a legend in substantially the following form:

“The transferability of this certificate and the Shares represented by it are
subject to the terms and conditions (including conditions of forfeiture)
contained in the Amended and Restated Cliffs 2007 Incentive Equity Plan, and an
agreement entered into between the registered owner and the Company. A copy of
this Plan and agreement are on file in the office of the Secretary of the
Company.”

At the end of any time period during which the Restricted Shares are subject to
forfeiture and restrictions on transfer, such Shares will be delivered free of
all restrictions (except for any pursuant to Section 15.2 hereof) to the
Participant and with the foregoing legend removed.

(e) Vesting of Shares. Unless otherwise provided in the Restricted Share
Agreement approved by the Committee, the Restricted Shares shall Vest 100% in
the event of the death or Disability of the Participant holding the Restricted
Shares and shall Vest pro-rata upon the Retirement of the Participant or the
termination of the Participant’s employment by the Company not for Cause based
upon the period from the Date of Grant of the Restricted Shares until his
Retirement or termination of employment by the Company not for Cause compared to
the total period the Shares would be subject to Restrictions. Upon any such
event, the Restrictions on the Shares so Vested will immediately lapse unless
there are performance conditions on the Shares which cannot be measured until
the end of the restriction period. If there are such performance conditions, the
restrictions will continue to apply until the end of the restriction period and
it can be determined whether all or a part of the performance conditions have
been satisfied. Any Restricted Shares which do not Vest on Retirement of the
Participant or termination of the Participant’s employment by the Company not
for Cause will be immediately forfeited pursuant to paragraph (f) below.

 

15

In the event that the employment of a Participant terminates for a reason other
than death, Disability, or Retirement, or is terminated by the Company not for
Cause, any Restricted Shares which had not previously Vested will be immediately
forfeited pursuant to paragraph (f) below.

(f) Forfeiture of Shares. If a Participant who holds Restricted Shares fails to
satisfy the restrictions, Vesting requirements and other conditions relating to
the Restricted Shares prior to the lapse, satisfaction or waiver of such
restrictions and conditions, the Participant shall forfeit the Shares and
transfer them back to the Company in exchange for a refund of any consideration
paid by the Participant or such other amount which may be specifically set forth
in the Award agreement. A Participant shall execute and deliver to the Company
one or more Stock Powers with respect to Restricted Shares granted to such
Participant.

(g) Voting and Other Rights. Except to the extent prohibited by Section 162(m)
of the Code and the terms of the applicable Restricted Share Agreement, during
any period in which Restricted Shares are subject to forfeiture and restrictions
on transfer, the Participant holding such Restricted Shares shall have all the
rights of a Shareholder with respect to such Shares, including, without
limitation, the right to vote such Shares and the right to receive any dividends
paid with respect to such Shares.

(h) Termination for Cause. If a Participant’s employment with the Company or its
Affiliates is terminated by the Company for Cause, all Restricted Shares (or
portions thereof) which have not been delivered to the Participant without
restrictions, whether Vested or not, are automatically forfeited immediately
upon termination of employment.

8.3 Restricted Share Unit Awards and Agreements. Restricted Share Unit Awards
consist of Shares that will be issued to a Participant at a future time or times
at no cost or at a purchase price determined by the Committee which may be below
their Fair Market Value if continued employment and/or other terms and
conditions specified by the Committee are satisfied. Each Restricted Share Unit
Award granted under this Plan (or delegation of authority to the Chief Executive
Officer to make Restricted Share Unit Awards) will be evidenced by minutes of a
meeting, or by a unanimous written consent without a meeting, of the Committee
and by a written agreement dated as of the Date of Grant and executed by the
Company and the Participant. The timing of Restricted Share Unit Awards and the
number of Restricted Share Units to be awarded (subject to Article 3 hereof) are
to be determined by the Committee in its sole discretion. By accepting a
Restricted Share Unit Award, the Participant agrees to remit to the Company when
due any required tax withholding or payment of cash as provided in Section 16.3
hereof.

8.4 Terms and Conditions of Restricted Share Unit Awards. Restricted Share Unit
Awards, including Retention Units, are subject to the following terms and
conditions, which, except as otherwise provided herein, need not be the same for
each Participant, and may contain such additional terms, conditions,
restrictions and contingencies not inconsistent with the terms of this Plan and
any operative employment or other agreement, as the Committee deems desirable:

(a) Purchase Price. The Committee shall determine the prices, if any, at which
Shares are to be issued to a Participant after Vesting of Restricted Share
Units, which may vary from time to time and among Participants and which may be
below the Fair Market Value of Shares at the Date of Grant.

(b) Restrictions. All Restricted Share Units awarded under this Plan will be
subject to such restrictions as the Committee may determine, which may include,
without limitation, the following:

(i) a prohibition against the sale, transfer, pledge or other encumbrance of the
Restricted Share Unit;

(ii) a requirement that the Participant forfeit such Restricted Share Unit in
the event of termination of the Participant’s employment with the Company or its
Affiliates prior to Vesting;

 

16

(iii) a prohibition against employment of the Participant by, or provision of
services by the Participant to, any competitor of the Company or its Affiliates,
or against dissemination by the Participant of any secret or confidential
information belonging to the Company or an Affiliate;

(iv) any applicable requirements arising under the Securities Act of 1933, as
amended, other securities laws, the rules and regulations of the New York Stock
Exchange or any other stock exchange or transaction reporting system upon which
the Shares are then listed or quoted and any state laws, rules and
interpretations, including “blue sky” laws.

(v) the restrictions described in Section 15.2 hereof; and

(vi) such additional restrictions as are required in order to avoid adverse tax
consequences under Section 409A of the Code.

The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.

(c) Performance-Based Restrictions. Except in the case of Retention Units, the
Committee may, in its sole discretion, provide restrictions that lapse upon the
attainment of specified performance objectives. In such case, the provisions of
Sections 10.3, 10.4 and 10.5(d) will apply and only the enumerated performance
objectives stated in Section 10.3 will apply.

(d) Voting and Other Rights. A Participant holding Restricted Share Units shall
not be deemed to be a Shareholder solely because of such Units. Such Participant
shall have no rights of a Shareholder with respect to such Units.

(e) Vesting of Units. Unless otherwise provided in the Restricted Share Unit
Agreement or Retention Unit Agreement approved by the Committee, the Restricted
Shares or Retention Units shall Vest 100% in the event of the death or
Disability of the Participant holding the Units and shall Vest pro-rata upon the
Retirement of such Participant or termination of the Participant’s employment by
the Company not for Cause based upon the period from the Date of Grant of the
Units until his Retirement or termination of his employment by the Company not
for Cause compared to the total period the Units would be subject to
restrictions. Upon any such event, the restrictions on 50 percent of the Units
so Vested will immediately lapse unless there are performance conditions on the
Units which cannot be measured until the end of the restriction period. If there
are such performance conditions, the restrictions will continue to apply until
the end of the restriction period and it can be determined whether all or a part
of the performance conditions have been satisfied. Any Units which do not Vest
on Retirement or termination of the Participant’s employment by the Company not
for Cause will be immediately forfeited pursuant to paragraph (g) below.

In the event that the employment of a Participant terminates for a reason other
than death, Disability, or Retirement, or is terminated by the Company not for
Cause, any Restricted Share Units and Retention Units which had not previously
Vested will be immediately forfeited pursuant to paragraph (g) below.

(f) Lapse of Restrictions. If a Participant who holds Restricted Share Units or
Retention Units satisfies the restrictions and other conditions relating to the
Units prior to the lapse or waiver of such restrictions and conditions, the
Units shall be converted to cash, or replaced with, Shares which are free of all
restrictions except for any restrictions required pursuant to Section 15.2
hereof. Notwithstanding the foregoing, the Committee may, in lieu of the
conversion and distribution of the Units, establish procedures to permit
deferral of Units of one or more Participants who are highly compensated
employees or members of a select group of management in accordance with the
terms of a deferred compensation plan sponsored by the Company.

(g) Forfeiture of Restricted Share Units. If a Participant who holds Restricted
Share Units or Retention Units fails to satisfy the restrictions, Vesting
requirements and other conditions relating

 

17

to the Units prior to the lapse, satisfaction or waiver of such restrictions and
conditions, the Participant shall forfeit the Units.

(h) Termination for Cause. If a Participant’s employment with the Company or its
Affiliates is terminated by the Company for Cause, all Restricted Share Units
and Retention Units (or portions thereof) which have not been paid in cash or
distributed in the form of Shares, whether Vested or not, are automatically
forfeited immediately upon termination of employment.

ARTICLE 9

DEFERRED SHARE AWARDS

9.1 Deferred Share Awards and Agreements. A Deferred Share Award is the right to
receive Shares at the end of a specified deferral period as determined by the
Committee. Each Deferred Share Award granted under this Plan (or delegation of
authority to the Chief Executive Officer to make Deferred Share Awards) will be
evidenced by minutes of a meeting, or by unanimous written consent without a
meeting, of the Committee and by a written agreement dated as of the Date of
Grant and executed by the Company and by the Participant. The timing of the
Deferred Share Awards and the number of Shares to be issued (subject to
Article 3 hereof) are to be determined by the Committee in its discretion. By
accepting a grant of Deferred Shares, the Participant agrees to remit to the
Company when due any required tax withholding or payment of cash as provided in
Section 16.3 hereof.

9.2 Terms and Conditions of Deferred Share Awards. Deferred Shares granted under
this Plan are subject to the following terms and conditions, and which need not
be the same for each Participant, and may contain such additional terms,
conditions, restrictions and contingencies not inconsistent with the terms of
this Plan and any operative employment or other agreement, as the Committee
deems desirable:

(a) Purchase Price. The Committee shall determine the prices, if any, at which
Deferred Shares are to be issued to a Participant, which may vary from time to
time and among Participants and which may be below the fair market value of such
Shares at the Date of Grant.

(b) Restrictions. All Deferred Shares awarded under this Plan will be subject to
such restrictions as the Committee may determine, which may include, without
limitation, the following:

(i) a prohibition against the sale, transfer, pledge or other encumbrance of the
Deferred Shares;

(ii) a requirement that the Participant forfeit such Deferred Shares in the
event of termination of the Participant’s employment with the Company or its
Affiliates prior to Vesting;

(iii) a prohibition against employment of the Participant by, or provision of
services by the Participant to, any competitor of the Company or its Affiliates,
or against dissemination by the Participant of any secret or confidential
information belonging to the Company or an Affiliate;

(iv) any applicable requirements arising under the Securities Act of 1933, as
amended, other securities laws, the rules and regulations of the New York Stock
Exchange or any other stock exchange or transaction reporting system upon which
the Shares are then listed or quoted and any state laws, rules and
interpretations, including “blue sky” laws;

(v) the restrictions described in Section 15.2 hereof; and

(vi) such additional restrictions as are required in order to avoid adverse tax
consequences under Section 409A of the Code.

The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.

 

18

(c) Deferral Period. Each Award of Deferred Shares shall provide that the
Deferred Shares covered thereby shall not be delivered to the Participant until
the end of the Deferral Period fixed by the Committee on the Date of Grant
(“Deferral Period”).

(d) Performance-Based Restrictions. The Committee may, in its sole discretion,
grant Deferred Share Awards only upon the attainment of specified performance
objectives. In such case, the provisions of Sections 10.3, 10.4 and 10.5(d) will
apply and only the enumerated performance objectives stated in Section 10.3 will
apply.

(e) Vesting of Deferred Shares. Unless otherwise provided in the Deferred Share
Agreement approved by the Committee, the Deferred Shares shall Vest 100% in the
event of the death or Disability of the Participant holding the Deferred Shares
Award and shall Vest pro-rata upon the Retirement of the Participant or
termination of the Participant’s employment by the Company not for Cause based
upon the period from the Date of Grant of the Deferred Share Award until his or
her Retirement or termination by the Company not for Cause compared to the total
Deferral Period. Upon death, Disability or Retirement, the Deferred Shares so
Vested will immediately be distributed to the Participant unless there are
performance conditions on the Deferred Share Award which cannot be measured
until the end of the Deferral Period. If there are such performance conditions,
the Shares shall not be delivered until the end of the Deferral Period and it
can be determined whether all or a part of the performance conditions have been
satisfied. Any Deferred Shares which do not Vest on Retirement or termination by
the Company not for Cause will be immediately forfeited pursuant to paragraph
(f) below.

In the event that the employment of a Participant terminates for a reason other
than death, Disability, or Retirement, or is terminated by the Company not for
Cause, any Deferred Shares which had not previously Vested will be immediately
forfeited pursuant to paragraph (f) below.

(f) Forfeiture of Deferred Shares. If a Participant who holds Deferred Shares or
Retention Units fails to satisfy the restrictions, Vesting requirements and
other conditions relating to the Units prior to the lapse, satisfaction or
waiver of such restrictions and conditions, the Participant shall forfeit the
Units.

(g) Termination for Cause. If a Participant’s employment with the Company or its
Affiliates is terminated by the Company for Cause, all Deferred Shares (or
portions thereof) which have not been distributed to the Participant, whether
Vested or not, are automatically forfeited immediately upon termination of
employment.

9.3 Special Limitations on Deferred Share Awards. Unless an Award agreement
approved by the Committee provides otherwise or unless the Participant elects to
defer an Award under the Cliffs Natural Resource Inc. (f/k/a Cleveland-Cliffs
Inc) Voluntary Non-Qualified Deferred Compensation Plan, Deferred Shares awarded
under this Plan are intended to meet the requirements for exclusion from
coverage under Section 409A of the Code and all Deferred Share Awards shall be
construed and administered accordingly.

ARTICLE 10

PERFORMANCE SHARE AND PERFORMANCE UNIT AWARDS

10.1 Performance Share Awards and Agreements. A Performance Share Award is a
right to receive cash or Shares, or a combination of cash and Shares, in the
future conditioned upon the attainment of specified performance objectives and
such other conditions, restrictions and contingencies as the Committee may
determine. Each Performance Share Award granted under this Plan (or delegation
of authority to the Chief Executive Officer to make Performance Share Awards)
will be evidenced by minutes of a meeting, or by a unanimous written consent
without a meeting, of the Committee and by a written agreement dated as of the
Date of Grant and executed by the Company

 

19

and by the Participant. The timing of Performance Share Awards and the number of
Shares covered by each Award (subject to Article 3 hereof) are to be determined
by the Committee in its discretion. By accepting a grant of Performance Shares,
the Participant agrees to remit to the Company when due any required tax
withholding or payment of cash as provided in Section 16.3 hereof.

10.2 Performance Unit Awards and Agreements. A Performance Unit Award is a right
to receive cash or Shares, or a combination of cash and Shares, in the future
conditioned upon the attainment of specified performance objectives and such
other conditions, restrictions and contingencies as the Committee may determine
if continued employment and/or other terms and conditions specified by the
Committee are satisfied. Each Performance Unit Award granted under this Plan (or
delegation of authority to the Chief Executive Officer to make Performance Unit
Awards) will be evidenced by minutes of a meeting, or by a unanimous written
consent without a meeting, of the Committee and by a written agreement dated as
of the Date of Grant and executed by the Company and by the Participant. The
timing of Performance Unit Awards and the number of Shares covered by each Award
(subject to Article 3 hereof) are to be determined by the Committee in its
discretion (or by the Chief Executive Officer if such officer has been delegated
the right to make Performance Unit Awards to certain Participants). By accepting
a grant of a Performance Unit, the Participant agrees to remit to the Company
when due any required tax withholding or payment of cash as provided in
Section 16.3 hereof.

10.3 Performance Objectives. At the time of grant of a Performance Share and/or
Performance Unit Award, the Committee will specify the performance objectives
which, depending on the extent to which they are met, will determine the number
of Shares/Units that will be distributed to the Participant. The Committee also
will specify the time period or periods (the “Performance Period”) during which
the performance objectives must be met. The performance objectives and periods
need not be the same for each Participant nor for each Award. The Committee may
use performance objectives based on any one or more of the following measures,
whether measured in absolute terms or relative to an external benchmark, and
whether measured in dollars, rates of growth, or relative ratios to sales in the
case of profit measures:

  (a)   net earnings or net income;

  (b)   operating earnings;

  (c)   pretax earnings;

  (d)   earnings per Share;

  (e)   Share price, including growth measures and total Shareholder return;

  (f)   earnings before interest and/or taxes;

  (g)   earnings before interest, taxes, depreciation and/or amortization;

  (h)   sales or revenues, whether in general, by type of product or service, or
by type of customer;

  (i)   gross or operating margins;

  (j)   return measures, including pre-tax or after-tax, before or after
depreciation and amortization: return on assets, capital, investment, equity,
sales or revenue;

  (k)   economic profit or economic value added;

  (l)   cash flow, including operating cash flow, free cash flow, cash flow
return on equity and cash flow return on investment;

  (m)   productivity ratios;

  (n)   expense or cost control;

 

20

  (o)   market share;

  (p)   financial ratios as provided in credit agreements of the Company and its
Subsidiaries;

  (q)   working capital targets, including net working capital, inventory,
accounts payable, and accounts receivable measured in absolute terms or as
turnover metrics (e.g., relative to sales or cost of goods sold, including
number of days);

  (r)   completion of acquisitions of business or companies;

  (s)   completion of divestitures and asset sales;

  (t)   safety performance; and

  (u)   any combination of any of the foregoing business criteria.

The Committee may designate a single goal criterion or multiple goal criteria
for performance measurement purposes, with the measurement based on consolidated
or business unit or divisional performance and/or on performance as compared
with that of other publicly-traded companies. The foregoing criteria may have
any reasonable definitions that the Committee may specify, which may include or
exclude any or all of the following items, as the Committee may specify:
extraordinary, unusual, or non-recurring items; effects of accounting changes;
effects of currency fluctuations; effects of financing activities (e.g., effect
on earnings per share of issuing convertible debt securities); effects of price
escalators; expenses for restructuring or productivity initiatives;
non-operating items; acquisition expenses; and effects of divestitures. Any such
performance criterion or combination of such criteria may apply to a
Participant’s Award opportunity in its entirety or to any designated portion or
portions of the Award opportunity, as the Committee may specify.

10.4 Adjustment of Performance Objectives. The Committee may modify, amend or
otherwise adjust the performance objectives specified for outstanding
Performance Share and/or Performance Unit Awards if it determines that, due to
an event as described below, an adjustment would be consistent with the
objectives of this Plan taking into account the interests of the Participants.
The types of events which could cause an adjustment in the performance
objectives include, without limitation, accounting changes which substantially
affect the determination of performance objectives, changes in applicable laws
or regulations which affect the performance objectives, and divisive corporate
reorganizations, including spin-offs and other distributions of property or
shares. Any such adjustments shall comply with the requirements of
Section 162(m) of the Code to the extent applicable.

10.5 Other Terms and Conditions of Performance Share and Performance Unit
Awards. Performance Share and Performance Unit Awards granted under this Plan
are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies not inconsistent
with the terms of this Plan and any operative employment or other agreement as
the Committee deems desirable:

(a) Delivery of Award. As soon as practicable after the applicable Performance
Period has ended, the Participant will receive a distribution of the amount in
cash or the number of Shares earned during the Performance Period, depending
upon the extent to which the applicable performance objectives were achieved.
Such Shares will be registered in the name of the Participant and will be free
of all restrictions except for any restrictions pursuant to Section 15.2 hereof.

(b) Vesting of Performance Shares and Performance Units. Unless otherwise
provided in the Performance Share or Performance Unit Agreement approved by the
Committee, the Performance Shares and Performance Units shall Vest 100% in the
event of the death or Disability of the Participant holding the Award and shall
Vest pro-rata upon the Retirement of such Participant or termination of the
Participant’s employment by the Company not for Cause based upon the period

 

21

from the Date of Grant of the Award until his Retirement or termination by the
Company not for Cause compared to the total Performance Period. However, no
payments will be made with respect to the Award until after the end of the
Performance Period and it is determined whether all or a part of the performance
conditions have been satisfied. Any Performance Shares or Performance Units
which do not Vest on Retirement or termination by the Company not for Cause will
be immediately forfeited pursuant to paragraph (e) below.

In the event that the employment of a Participant terminates for a reason other
than death, Disability, or Retirement, or is terminated by the Company not for
Cause, any Performance Shares and Performance Units which had not previously
Vested will be immediately forfeited pursuant to paragraph (e) below.

(c) Voting and Other Rights. Awards of Performance Shares and/or Performance
Units do not provide the Participant with voting rights or rights to dividends
prior to the Participant becoming the holder of record of Shares issued pursuant
to an Award. Prior to the issuance of Shares, Performance Share and Performance
Unit Awards may not be sold, transferred, pledged, assigned or otherwise
encumbered.

(d) Performance-Based Compensation. The Committee may designate Performance
Share and/or Performance Unit Awards as being “remuneration payable solely on
account of the attainment of one or more performance goals” as described in
Section 162(m)(4)(C) of the Code. Such Awards shall be automatically amended or
modified to comply with amendments to Section 162 of the Code to the extent
applicable, unless the Committee indicates a contrary intention.

(e) Forfeiture of Performance Shares and Performance Units. If a Participant who
holds Performance Shares and/or Performance Units fails to satisfy the
performance goals, Vesting requirements and other conditions related to the
Award, the Participant shall forfeit the Performance Shares and/or Performance
Units.

10.6 Special Limitations on Performance Share and Performance Unit Awards.
Unless an Award agreement approved by the Committee provides otherwise or unless
the Participant elects to defer an Award under the Cliffs Natural Resource Inc.
(f/k/a Cleveland-Cliffs Inc) Voluntary Non-Qualified Deferred Compensation Plan,
Performance Shares and Performance Units awarded under this Plan are intended to
meet the requirements for exclusion from coverage under Section 409A of the Code
and all Performance Share and Performance Unit Awards shall be construed and
administered accordingly.

ARTICLE 11

TRANSFERS AND LEAVES OF ABSENCE

11.1 Transfer of Participant. For purposes of this Plan, except as provided in
Section 6.2(f) with respect to Incentive Stock Options, the transfer of a
Participant among the Company and its Affiliates is deemed not to be a
termination of employment.

11.2 Effect of Leaves of Absence. For purposes of this Plan, the following
leaves of absence are deemed not to be a termination of employment:

(a) a leave of absence, approved in writing by the Company, for military
service, sickness or any other purpose approved by the Company, if the period of
such leave does not exceed 90 days;

 

22

(b) a leave of absence in excess of 90 days, approved in writing by the Company,
but only if the employee’s right to reemployment is guaranteed either by a
statute or by contract, and provided that, in the case of any such leave of
absence, the employee returns to work within 30 days after the end of such
leave; and

(c) any other absence determined by the Committee in its discretion not to
constitute a break in service.

ARTICLE 12

EFFECT OF CHANGE IN CONTROL

12.1 Change in Control Defined. The words “Change in Control” mean the
occurrence during the Term of any of the following events:

(a) Any one person, or more than one person acting as a group, acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company. However, if any one person, or more
than one person acting as a group, is considered to own more than 50% of the
total fair market value or total voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons is not considered
to cause a Change in Control. An increase in the percentage of stock owned by
any one person, or persons acting as a group, as a result of a transaction in
which the Company acquires its stock in exchange for property will be treated as
an acquisition of stock for purposes of this Section 12.1. This Section 12.1
applies only when there is a transfer of stock of the Company (or issuance of
stock of the Company) and stock in the Company remains outstanding after the
transaction.

(b) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company
possessing 35% or more of the total voting power of the stock of the Company.

(c) A majority of members of the Board of Directors is replaced during any
12-month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Board of Directors prior to the date of the
appointment or election.

(d) Any one person, or more than one person acting as a group. acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 40% of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition
or acquisitions.

For purposes of this Section 12.1, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company. If a person, including an entity, owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of
stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in a corporation prior to the transaction giving
rise to the change and not with respect to the ownership interest in the other
corporation.

12.2 Acceleration of Awards. Except as otherwise provided in this Plan or an
Award agreement, immediately upon the occurrence of a Change in Control all
outstanding Awards of any type under this Plan shall automatically become fully
Vested.

 

23

ARTICLE 13

TRANSFERABILITY OF AWARDS

13.1 Awards Are Non-Transferable. Except as provided in Sections 13.2 and 13.3,
Awards are non-transferable and any attempts to assign, pledge, hypothecate or
otherwise alienate or encumber (whether by operation of law or otherwise) any
Award shall be null and void.

13.2 Inter-Vivos Exercise of Awards. During a Participant’s lifetime, Awards are
exercisable only by the Participant or, as permitted by applicable law and
notwithstanding Section 13.1 to the contrary, the Participant’s guardian or
other legal representative.

13.3 Limited Transferability of Certain Awards. The Committee, in its
discretion, may allow at or after the time of grant the transferability of
Awards which are Vested, provided that the permitted transfer (i) is made
pursuant to a QDRO or other applicable domestic relations order to the extent
permitted by law; (ii) if the Award is an Incentive Stock Option, is consistent
with Section 422 of the Code; (iii) is made to the Company (for example in the
case of forfeiture of Restricted Shares), an Affiliate or a person acting as the
agent of the foregoing or is otherwise determined by the Committee to be in the
interests of the Company; or (iv) is made by the Participant for no
consideration to Immediate Family Members or to a bona fide trust, partnership
or other entity controlled by and for the benefit of one or more Immediate
Family Members. “Immediate Family Members” mean the Participant’s spouse,
children, stepchildren, parents, stepparents, siblings (including half brothers
and sisters), in-laws and other individuals who have a relationship to the
Participant arising because of a legal adoption. No transfer may be made to the
extent that transferability would cause Form S-8 or any successor form thereto
not to be available to register Shares related to an Award. The Committee in its
discretion may impose additional terms and conditions upon transferability.

ARTICLE 14

AMENDMENT AND DISCONTINUATION

14.1 Amendment or Discontinuation of this Plan. The Board of Directors may
amend, alter, or discontinue this Plan at any time, provided that no amendment,
alteration, or discontinuance may be made:

(a) which would materially and adversely affect the rights of a Participant
under any Award granted prior to the date such action is adopted by the Board of
Directors without the Participant’s written consent thereto; and

(b) without Shareholder approval, if Shareholder approval is required under
applicable laws, regulations or securities exchange requirements.

14.2 Amendment of Awards. The Committee may amend, prospectively or
retroactively, the terms of any outstanding Award, provided that no such
amendment may be inconsistent with the terms of this Plan (specifically
including the prohibition on granting Stock Options with an Exercise Price less
than 100% of the Fair Market Value of the Shares on the Date of Grant), would
materially and adversely affect the rights of any holder without his or her
written consent, or would, in the case of performance-based Awards, violate the
terms and provisions of Section 162(m) of the Code or the regulations issued
under such Section 162(m).

14.3 Effect of Non-Approval of this Plan. This Plan shall cease to be operative
if it is not approved by a majority of the outstanding Shares present (in
person, telephonically, electronically, by proxy or its equivalent or as
otherwise permitted by the Company’s governing documents) and entitled to vote
on

 

24

the approval of this Plan at a meeting of Shareholders of the Company. In the
event of such a cessation, any Awards under the Plan shall be revoked and this
Plan shall be deemed null and void ab initio. In the event of such a cessation,
the Company, the Board of Directors and the Committee shall not be liable for
any such Awards under this Plan.

14.4 Term. Unless sooner discontinued by the Board of Directors under
Section 14.1 hereof, this Plan shall terminate on March 13, 2013, the 6th
anniversary of its adoption.

14.5 Effect of Termination. Upon termination or discontinuance of this Plan, all
Awards previously granted under this Plan shall continue in full force and
effect in accordance with the terms of the Award and the terms of this Plan as
in effect when the Award was made.

ARTICLE 15

SHARE CERTIFICATES

15.1 Delivery of Share Certificates. The Company is not required to issue or
deliver any certificates for Shares issuable with respect to Awards under this
Plan prior to the fulfillment of all of the following conditions:

(a) payment in full of any required tax withholding or payment of cash (as
provided in Section 16.3 hereof);

(b) completion of any registration or other qualification of such Shares under
any Federal or state laws or under the rulings or regulations of the Securities
and Exchange Commission or any other regulating body which the Committee in its
discretion deems necessary or advisable;

(c) admission of such Shares to listing on the New York Stock Exchange or any
stock exchange on which the Shares are listed;

(d) in the event the Shares are not registered under the Securities Act of 1933,
qualification as a private placement under said Act;

(e) obtaining of any approval or other clearance from any Federal or state
governmental agency which the Committee in its discretion determines to be
necessary or advisable; and

(f) the Committee is fully satisfied that the issuance and delivery of Shares
under this Plan is in compliance with applicable Federal, state or local law,
rule, regulation or ordinance or any rule or regulation of any other regulating
body, for which the Committee may seek approval of counsel for the Company.

15.2 Applicable Restrictions on Shares. Shares issued with respect to Awards may
be subject to such stock transfer orders and other restrictions as the Committee
may determine necessary or advisable under any applicable Federal or state
securities law rules, regulations and other requirements, the rules, regulations
and other requirements of the New York Stock Exchange or any stock exchange upon
which the Shares are then listed, and any other applicable Federal or state law
and will include any restrictive legends the Committee may deem appropriate to
include.

In addition, the Committee may restrict 50% of the Shares issued with respect to
Awards so that they cannot be sold by the Participant unless immediately after
such sale, the Participant is in compliance with any share ownership guidelines
established by the Company that are applicable to the Participant at the time of
sale.

15.3 Book Entry. In lieu of the issuance of share certificates evidencing
Shares, the Company may use a “book entry” system in which a computerized or
manual entry is made in the records of the Company to evidence the issuance of
such Shares. Such Company records are, absent manifest error, binding on all
parties.

 

25

ARTICLE 16

GENERAL PROVISIONS

16.1 No Implied Rights to Awards or Employment. No potential Participant has any
claim or right to be granted an Award under this Plan, and there is no
obligation of uniformity of treatment of Participants under this Plan. Neither
this Plan nor any Award thereunder shall be construed as giving any individual
any right to continued employment with the Company or any Affiliate. The Plan
does not constitute a contract of employment, and the Company and each Affiliate
expressly reserve the right at any time to terminate employees free from
liability, or any claim, under this Plan, except as may be specifically provided
in this Plan or in an Award agreement.

16.2 Other Compensation Plans. Nothing contained in this Plan prevents the Board
of Directors from adopting other or additional compensation arrangements,
subject to Shareholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases.

16.3 Withholding. Each Participant must, no later than the date as of which the
value of an Award first becomes includible in the gross income of the
Participant for income tax purposes, pay, in cash, to the Company, or make
arrangements satisfactory to the Company regarding payment of, any Federal,
state or local taxes of any kind required by law or other amounts to be withheld
with respect to the Award. The obligations of the Company under this Plan are
conditioned on such payment, and the Company, to the extent permitted by law,
has the right to deduct any such taxes or other amounts from any payment of any
kind otherwise due to a Participant, with or without such Participant’s consent.

16.4 Foreign Employees. In order to facilitate the making of any Award or
combination of Awards under this Plan, the Committee may provide for such
special terms for Awards to Participants who are foreign nationals, or who are
employed by the Company or any Subsidiary outside of the United States of
America, as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to, or amendments, restatements or alternative versions
of this Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of this Plan as in effect for any other
purpose, and the Secretary or other appropriate officer of the Company may
certify any such document as having been approved and adopted in the same manner
as this Plan. No such special terms, supplements, amendments, restatements or
alternative versions shall include any provisions that are inconsistent with the
terms of this Plan, as then in effect, unless this Plan could have been amended
to eliminate such inconsistency without further approval by the Shareholders of
the Company.

16.5 Rule 16b-3 Compliance. The Plan is intended to comply with all applicable
conditions of Rule 16b-3 of the Exchange Act, as such rule may be amended from
time to time. All transactions involving any Participant subject to
Section 16(a) of the Exchange Act shall be subject to the conditions set forth
in Rule 16b-3, regardless of whether such conditions are expressly set forth in
this Plan. Any provision of this Plan that is contrary to Rule 16b-3 does not
apply to such Participants.

16.6 Code Section 162(m) Compliance. The Plan is intended to comply with all
applicable requirements of Section 162(m) of the Code with respect to
“performance-based compensation.” Unless the Committee shall otherwise
determine, all transactions involving any Participant the deductibility of whose
compensation is subject to Section 162(m) of the Code shall be subject to such
requirements, regardless of whether such requirements are expressly set forth in
this Plan. Unless the Committee shall otherwise determine, any provision of this
Plan that is contrary to such requirements does not apply to such Participants.

 

26

16.7 Successors. All obligations of the Company with respect to Awards granted
under this Plan are binding on any successor to the Company, whether as a result
of a direct or indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the Company.

16.8 Severability. In the event any provision of this Plan, or the application
thereof to any person or circumstances, is held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of
this Plan, or other applications, and this Plan is to be construed and enforced
as if the illegal or invalid provision had not been included.

16.9 Governing Law. To the extent not preempted by Federal law, this Plan and
all Award agreements pursuant thereto are construed in accordance with and
governed by the laws of the State of Ohio. This Plan is not intended to be
governed by ERISA and shall be so construed and administered.

ARTICLE 17

EFFECTIVE DATE

17.1 Effective Date. Subject to the approval of the Shareholders of the Company
at the Annual Meeting of Shareholders held in 2007, the effective date of this
Cliffs Natural Resource Inc. (f/k/a Cleveland-Cliffs Inc) 2007 Incentive Equity
Plan is the date of its adoption by the Board of Directors on March 13, 2007. To
the extent that Awards are made under this Plan prior to its approval by
Shareholders, they shall be contingent upon Shareholder approval of this Plan.

 

27