Document:

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                                                                 Exhibit 10(jj)

                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

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                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

                                TABLE OF CONTENTS
                                                                           PAGE

1.       General Statement of Purpose.........................................1
2.       Effective and Termination Dates......................................1
3.       Definitions..........................................................1
4.       Eligibility; Termination Following a Change in Control...............5
5.       Severance Compensation...............................................7
6.       Certain Additional Payments by the Company...........................8
7.       No Mitigation Obligation............................................11
8.       Certain Payments not Considered for Other Benefits, etc.............11
9.       Confidentiality; Confidential Information; Noncompetition...........11
10.      Release.............................................................12
11.      Legal Fees and Expenses.............................................12
12.      Employment Rights...................................................13
13.      Withholding of Taxes................................................14
14.      Successors and Binding Effect.......................................14
15.      Governing Law.......................................................14
16.      Validity............................................................14
17.      Captions............................................................15
18.      Construction........................................................15
19.      Administration of the Plan..........................................15
20.      Amendment and Termination...........................................16
21.      Other Plans, etc....................................................16

EXHIBIT A...................................................................A-1
EXHIBIT B - Form of Confidentiality and Non-Compete Agreement...............B-1
EXHIBIT C - Form of Release.................................................C-1

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                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

     1. GENERAL STATEMENT OF PURPOSE. The Board of Directors of Cleveland-Cliffs
Inc (the "Company") has considered the effect a change in control of the Company
may have on executives of the Company and its Subsidiaries (as defined below).
The executives have made and are expected to continue to make major
contributions to the short-term and long-term profitability, growth and
financial strength of the Company and its Subsidiaries. The Company recognizes
that, as is the case for most publicly held companies, the possibility of a
change in control exists, desires to assure itself of both the present and
future continuity of management, desires to establish certain minimum severance
benefits for certain of its executives applicable in a change in control, and
wishes to insure that its executives are not practically disabled from
discharging their duties in respect of a proposed or actual transaction
involving a change in control.

         As a result, the Board believes that the Cleveland-Cliffs Inc Change in
Control Severance Pay Plan (the "Plan") will assist the Company in attracting
and retaining qualified executives. Accordingly, the Plan is hereby adopted and
supersedes any other change in control arrangement for Executives (as defined
below).

     2. EFFECTIVE AND TERMINATION DATES. The Plan shall be effective as of
January 1, 2000 (the "Effective Date"). The Plan will automatically terminate on
the later of (i) December 31, 2001 or (ii) the second anniversary of a Change in
Control (the "Termination Date"); provided, however, that commencing on January
1, 2001 and each January 1 thereafter, the Termination Date set forth in
Subsection (i) of this Section will automatically be extended for an additional
year unless, not later than September 30 of the immediately preceding year, the
Company shall have given written notice to the Executives that the Termination
Date is not to be so extended.

     3. DEFINITIONS. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their context
clearly indicates otherwise:

          (1) "Base Pay" means the Executive's annual base salary rate as in
effect from time to time.

          (2) "Board" means the Board of Directors of the Company.

          (3) "Cause" means that, prior to any termination pursuant to Section
4(b), Section 4(c), or Section 4(d) the Executive shall have committed:

          (1) 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;

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          (2) intentional wrongful damage to property of the Company or any
     Subsidiary;

          (3) intentional wrongful disclosure of secret processes or
     confidential information of the Company or any Subsidiary; or

          (4) intentional wrongful engagement in any Competitive Activity;

     and any such act shall have been demonstrably and materially harmful to the
     Company. For purposes of the Plan, no act or failure to act on the part of
     the Executive 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 Executive not in good faith and without
     reasonable belief that the Executive's action or omission was in the best
     interest of the Company. Notwithstanding the foregoing, the Executive shall
     not be deemed to have been terminated for "Cause" hereunder unless and
     until there shall have been delivered to the Executive a copy of a
     resolution duly adopted by the affirmative vote of not less than three
     quarters of the Board then in office at a meeting of the Board called and
     held for such purpose, after reasonable notice to the Executive and an
     opportunity for the Executive, together with the Executive's counsel (if
     the Executive chooses to have counsel present at such meeting), to be heard
     before the Board, finding that, in the good faith opinion of the Board, the
     Executive had committed an act constituting "Cause" as herein defined and
     specifying the particulars thereof in detail. Nothing herein will limit the
     right of the Executive or his beneficiaries to contest the validity or
     propriety of any such determination.

          (4) "Change in Control" means the occurrence during the Term of any of
the following events:

          (i) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
     of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of 30% or more of the combined voting power of the then
     outstanding Voting Stock of the Company; provided, however, that for
     purposes of this Section 1(d)(i), the following acquisitions shall not
     constitute a Change in Control: (A) any issuance of Voting Stock of the
     Company directly from the Company that is approved by the Incumbent Board
     (as defined in Section 1(d)(ii), below), (B) any acquisition by the Company
     of Voting Stock of the Company, (C) any acquisition of Voting Stock of the
     Company by any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any Subsidiary, or (D) any acquisition of
     Voting Stock of the Company by any Person pursuant to a Business
     Combination that complies with clauses (A), (B) and (C) of Section
     1(d)(iii), below; or

          (ii) individuals who, as of the date hereof, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board; provided, however, that any individual becoming a Director
     subsequent to the date hereof whose election, or nomination for election by
     the Company's shareholders, was approved by a vote of at least a majority
     of the Directors then comprising the Incumbent Board (either by a

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     specific vote or by approval of the proxy statement of the Company in which
     such person is named as a nominee for director, without objection to such
     nomination) shall be deemed to have been a member of the Incumbent Board,
     but excluding, for this purpose, any such individual whose initial
     assumption of office occurs as a result of an actual or threatened election
     contest (within the meaning of Rule 14a-11 of the Exchange Act) with
     respect to the election or removal of Directors or other actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board; or

          (iii) consummation of a reorganization, merger or consolidation
     involving the Company, a sale or other disposition of all or substantially
     all of the assets of the Company, or any other transaction involving the
     Company (each, a "Business Combination"), unless, in each case, immediately
     following such Business Combination, (A) all or substantially all of the
     individuals and entities who were the beneficial owners of Voting Stock of
     the Company immediately prior to such Business Combination beneficially
     own, directly or indirectly, more than 55% of the combined voting power of
     the then outstanding shares of Voting Stock of the entity resulting from
     such Business Combination (including, without limitation, an entity which
     as a result of such transaction owns the Company or all or substantially
     all of the Company's assets either directly or through one or more
     subsidiaries) in substantially the same proportions relative to each other
     as their ownership, immediately prior to such Business Combination, of the
     Voting Stock of the Company, (B) no Person (other than the Company, such
     entity resulting from such Business Combination, or any employee benefit
     plan (or related trust) sponsored or maintained by the Company, any
     Subsidiary or such entity resulting from such Business Combination)
     beneficially owns, directly or indirectly, 30% or more of the combined
     voting power of the then outstanding shares of Voting Stock of the entity
     resulting from such Business Combination, and (C) at least a majority of
     the members of the Board of Directors of the entity resulting from such
     Business Combination were members of the Incumbent Board at the time of the
     execution of the initial agreement or of the action of the Board providing
     for such Business Combination; or

          (iv) approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company, except pursuant to a Business
     Combination that complies with clauses (A), (B) and (C) of Section
     1(d)(iii).

          (5) "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.

          (6) "Committee" means the Organization and Compensation Committee of
the Board.

          (7) "Competitive Activity" means the Executive's participation,
without the written consent of an officer of the Company, in the management of
any business enterprise if such enterprise engages in substantial and direct
competition with the Company and such enterprise's sales of any product or
service competitive with any product or service of the Company amounted to 10%

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of such enterprise's net sales for its most recently completed fiscal year and
if the Company's net sales of said product or service amounted to 10% of the
Company's net sales for its most recently completed fiscal year. "Competitive
Activity" will not include (i) the mere ownership of securities in any such
enterprise and the exercise of rights appurtenant thereto or (ii) participation
in the management of any such enterprise other than in connection with the
competitive operations of such enterprise.

          (8) "Employee Benefits" means the perquisites, benefits and service
credit for benefits as provided under any and all employee retirement income and
welfare benefit policies, plans, programs or arrangements in which Executive is
entitled to participate, including without limitation any stock option,
performance share, performance unit, stock purchase, stock appreciation,
savings, pension, supplemental executive retirement, or other retirement income
or welfare benefit, deferred compensation, incentive compensation, group or
other life, health, medical/hospital or other insurance (whether funded by
actual insurance or self-insured by the Company or a Subsidiary), disability,
salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements that may now exist or any equivalent successor
policies, plans, programs or arrangements that may be adopted hereafter by the
Company or a Subsidiary, providing perquisites, benefits and service credit for
benefits at least as great in value in the aggregate as are payable thereunder
prior to a Change in Control.

          (9) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (10) "Executive" means an elected officer who is a full-time employee
of the Company and who is a Senior Vice President, Vice President, Controller or
Secretary of the Company, or who is a Mine General Manager of a Subsidiary, and
who does not have an individual Severance Agreement with the Company providing
for benefits upon a Change in Control.

          (11) "Incentive Pay" means an annual bonus, incentive or other payment
of compensation, in addition to Base Pay, made or to be made in regard to
services rendered in any year or other period pursuant to any bonus, incentive,
profit-sharing, performance, discretionary pay or similar agreement, policy,
plan, program or arrangement (whether or not funded) of the Company or a
Subsidiary, or any successor thereto.

          (12) "Industry Service" means professionally related service, prior to
his employment by the Company or a Subsidiary, by the Executive as an employee
within the iron, steel and mining industries or service within an industry to
which such Executive's position with the Company relates. The Executive shall be
given credit for one year of Industry Service for every two years of service
with the Company, as designated in writing by, or in minutes of the actions of,
the Compensation and Organization Committee of the Board, and such years of
credited Industry Service shall be defined as "Credited Years of Industry
Service."

          (13) "Retirement Plans" means the retirement income, supplemental
executive retirement, excess benefits and retiree medical, life and similar
benefit plans providing retirement

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perquisites, benefits and service credit for benefits at least as great in value
in the aggregate as are payable thereunder prior to a Change in Control.

          (14) "Severance Compensation" means Severance Pay and other benefits
provided by Section 5(a) and (b).

          (15) "Severance Pay" means the amounts payable as set forth in Section
5(a) and (b).

          (16) "Severance Period" means the period of time commencing on the
date of the first occurrence of a Change in Control and continuing until the
earlier of (i) the second anniversary of the occurrence of the Change in
Control, or (ii) the Executive's death.

          (17) "Subsidiary" means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding capital or profits
interests or Voting Stock.

          (18) "Supplemental Retirement Plan" or "SRP" means the
Cleveland-Cliffs Inc Supplemental Retirement Benefit Plan (as Amended and
Restated as of January 1, 1999), as it may be amended prior to a Change in
Control, and modified as provided in Exhibit A, Paragraph (3).

          (19) "Termination Date" means the date of termination of the Plan as
specified in Section 2.

          (20) "Voting Stock" means securities entitled to vote generally in the
election of directors.

          4. ELIGIBILITY; TERMINATION FOLLOWING A CHANGE IN CONTROL.

          (1) Subject to the limitations described below, the Plan applies to
Executives who are employed on the date that a Change in Control occurs.

          (2) If an Executive's employment is terminated by the Company or any
Subsidiary during the Severance Period and such termination is without Cause,
the Executive will be entitled to the Severance Compensation described in
Section 5.

          (3) An Executive who is a Senior Vice President, Vice President,
Controller or Secretary of the Company may, during the Severance Period,
terminate his employment with the Company or any Subsidiary with the right to
Severance Compensation upon the occurrence of one or more of the following
events (regardless of whether any other reason, other than Cause, for such
termination exists or has occurred, including without limitation other
employment):

          (1) (A) A significant adverse change in the nature or scope of the
     authorities, powers, functions, responsibilities or duties attached to the
     position with the Company and

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     any Subsidiary which the Executive held immediately prior to the Change in
     Control, (B) a reduction in the Executive's Base Pay, (C) a reduction in
     the Executive's opportunity to receive Incentive Pay from the Company and
     any Subsidiary, or (D) the termination or denial of the Executive's rights
     to Employee Benefits or a reduction in the scope or value thereof, any of
     which is not remedied by the Company within 10 calendar days after receipt
     by the Company of written notice from the Executive of such change,
     reduction or termination, as the case may be;

          (2) The liquidation, dissolution, merger, consolidation or
     reorganization of the Company or transfer of all or substantially all of
     its business and/or assets, unless the successor or successors (by
     liquidation, merger, consolidation, reorganization, transfer or otherwise)
     to which all or substantially all of its business and/or assets have been
     transferred (by operation of law or otherwise) assumed all duties and
     obligations of the Company under the Plan pursuant to Section 14(a);

          (3) The Company relocates its principal executive offices (if such
     offices are the principal location of Executive's work), or requires the
     Executive to have his principal location of work changed, to any location
     that, in either case, is in excess of 25 miles from the location thereof
     immediately prior to the Change in Control, without his prior written
     consent; or

          (4) Without limiting the generality or effect of the foregoing, any
     material breach of the Plan by the Company or any successor thereto which
     is not remedied by the Company within 10 calendar days after receipt by the
     Company of written notice from the Executive of such breach.

          (4) An Executive who is a Mine General Manager may, during the
Severance Period, terminate his employment with the Company or any Subsidiary
with the right to Severance Compensation upon the occurrence of one or more of
the following events (regardless of whether any other reason, other than Cause,
for such termination exists or has occurred, including without limitation other
employment):

          (1) (A) A reduction in the Executive's Base Pay, (B) a reduction in
     the Executive's opportunity to receive Incentive Pay from the Company and
     any Subsidiary, or (C) the termination or denial of the Executive's rights
     to Employee Benefits or a reduction in the scope or value thereof, any of
     which is not remedied by the Company within 10 calendar days after receipt
     by the Company of written notice from the Executive of such reduction or
     termination, as the case may be;

          (2) The liquidation, dissolution, merger, consolidation or
     reorganization of the Company or transfer of all or substantially all of
     its business and/or assets, unless the successor or successors (by
     liquidation, merger, consolidation, reorganization, transfer or otherwise)
     to which all or substantially all of its business and/or assets, have been
     transferred

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     (directly or by operation of law) assumed all duties and obligations of the
     Company under the Plan pursuant to Section 14(a);

          (3) The Company relocates its principal executive offices (if such
     offices are the principal location of Executive's work), or requires the
     Executive to have his principal location of work changed, to any location
     that, in either case, is in excess of 25 miles from the location thereof
     immediately prior to the Change in Control, without his prior written
     consent; or

          (4) Without limiting the generality or effect of the foregoing, any
     material breach of its obligations under the Plan by the Company or any
     successor thereto which is not remedied by the Company within 10 calendar
     days after receipt by the Company of written notice from the Executive of
     such breach.

          (5) A termination by an Employer pursuant to Subsection (b) of this
Section or by an Executive pursuant to Subsections (c) or (d) of this Section
will not affect any rights that the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of the Company or Subsidiary
providing Employee Benefits, which rights shall be governed by the terms
thereof, except for any rights to severance compensation to which an Executive
may be entitled upon termination of employment under any severance pay policy,
plan, program or arrangement of the Company, which rights shall, during the
Severance Period, be superseded by the Plan.

          (6) Notwithstanding the preceding provisions of this Section, an
Executive will not be entitled to Severance Compensation if his employment with
an Employer is terminated during the Severance Period because:

          (1) of the Executive's death; or

          (2) the Executive becomes permanently disabled within the meaning of,
     and begins actually to receive disability benefits pursuant to, the
     long-term disability plan in effect for, or applicable to, the Executive
     immediately prior to the Change in Control.

          5. SEVERANCE COMPENSATION.

          (1) If an Executive's employment is terminated pursuant to Section
4(b) or if an Executive terminates his employment pursuant to Section 4(c) or
4(d), the Company will pay to the Executive as Severance Pay the amounts
described on Exhibit A within 10 business days after the termination date, or,
if later, upon the expiration of the revocation period provided for in Exhibit
C, and will continue to provide to the Executive the other Severance
Compensation described on Exhibit A for the periods described therein.

          (2) Without limiting the rights of an Executive at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a

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timely basis, the Company will pay interest on the amount or value thereof at an
annualized rate of interest equal to the so-called composite "prime rate" as
quoted from time to time during the relevant period in the Midwest Edition of
THE WALL STREET JOURNAL plus 2%. Such interest will be payable as it accrues on
demand. Any change in such prime rate or maximum rate will be effective on and
as of the date of such change.

          (3) Notwithstanding any provision of the Plan to the contrary, the
rights and obligations under this Section and under Sections 6 and 11, the last
sentence of Section 12 and Paragraph (3) of Exhibit A will survive any
termination or expiration of the Plan or the termination of an Executive's
employment following a Change in Control for any reason whatsoever.

          (4) Unless otherwise expressly provided by the applicable policy,
plan, program or agreement, after the occurrence of a Change in Control, the
Company shall pay in cash to the Executive a lump sum amount equal to the value
of any annual bonus or long-term incentive pay (including, without limitation,
incentive-based annual cash bonuses and performance units, but not including any
equity-based compensation or compensation provided under a qualified plan)
earned or granted with respect to the Executive's service during the performance
period or periods that includes the date on which the Change in Control
occurred, disregarding any applicable vesting requirements; provided that such
amount shall be calculated at the plan target rate, but prorated on the portion
of the Executive's service that had elapsed during the applicable performance
period. Such payment shall take into account service rendered through the
payment date and shall be made at the earlier of (i) the date prescribed for
payment pursuant to the applicable plan, program or agreement, and (ii) within
five business days after the Termination Date.

          (5) Notwithstanding any provision to the contrary in any applicable
grants and policy, plan, program or agreement, upon the occurrence of a Change
in Control, all equity incentive grants and awards held by the Executive shall
become fully vested and all stock options held by the Executive shall become
fully exercisable.

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          6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

          (1) Anything in the Plan to the contrary notwithstanding, in the event
that it shall be determined (as hereafter provided) that any payment or
distribution by the Company or any of its affiliates to or for the benefit of an
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of the Plan or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation
any stock option, performance share, performance unit, stock appreciation right
or similar right, or the lapse or termination of any restriction on, or the
vesting or exercisability of, any of the foregoing (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto) by reason of being considered "contingent on a change in
ownership or control" of the Company, within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such tax (such tax or
taxes, together with any such interest and penalties, being hereafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment or payments (collectively, a "Gross-Up
Payment"); provided, however, that no Gross-up Payment shall be made with
respect to the Excise Tax, if any, attributable to (i) any incentive stock
option, as defined by Section 422 of the Code ("ISO") granted prior to the
execution of the Plan, or (ii) any stock appreciation or similar right, whether
or not limited, granted in tandem with any ISO described in clause (i). The
Gross-Up Payment shall be in an amount such that, after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.

          (2) Subject to the provisions of Subsection (f) of this Section, all
determinations required to be made under this Section, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required to be paid by the Company to the
Executive and the amount of such Gross-Up Payment, if any, shall be made by the
accounting firm serving as the Company's independent public accountants
immediately prior to the change in control (the "Accounting Firm"). The Company
shall direct the Accounting Firm to submit its determination and detailed
supporting calculations to both the Company and the Executive within 30 calendar
days after the Termination Date, if applicable, and any such other time or times
as may be requested by the Company or the Executive. If the Accounting Firm
determines that any Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within 5 business days after
receipt of such determination and calculations with respect to any Payment to
the Executive. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall, at the same time as it makes such determination,
furnish the Company and the Executive an opinion that the Executive has
substantial authority not to report any Excise Tax on his federal, state or
local income or other tax return. As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision thereto) and
the possibility of similar uncertainty regarding applicable state or local tax
law at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (an "Underpayment"), consistent with the calculations

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required to be made hereunder. In the event that the Company exhausts or fails
to pursue its remedies pursuant to Subsection (f) of this Section and the
Executive thereafter is required to make a payment of any Excise Tax, the
Executive shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and the Executive as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the Executive within 5 business days after receipt of such
determination and calculations.

          (3) The Company and the Executive shall each provide the Accounting
Firm access to and copies of any books, records and documents in the possession
of the Company or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determinations and calculations
contemplated by Subsection (b) of this Section. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon
the Company and the Executive.

          (4) The federal, state and local income or other tax returns filed by
the Executive shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of the amount of any
Excise Payment, and at the request of the Company, provide to the Company true
and correct copies (with any amendments) of his federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment. If
prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within 5 business days pay to the Company the amount of such
reduction.

          (5) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Subsection
(b) of this Section shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within 10 business days after receipt from
the Executive of a statement therefor and reasonable evidence of his payment
thereof.

          (6) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service or any other taxing authority that, if successful,
would require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as promptly as practicable but no later than 10
business days after the Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid (in each case, to the extent
known by the Executive). The Executive shall not pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period following the date
on which he gives such notice to the Company and (ii) the date that any payment

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of amount with respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

               (1) provide the Company with any written records or documents in
          his possession relating to such claim reasonably requested by the
          Company;

               (2) take such action in connection with contesting such claim as
          the Company shall reasonably request in writing from time to time,
          including without limitation accepting legal representation with
          respect to such claim by an attorney competent in respect of the
          subject matter and reasonably selected by the Company;

               (3) cooperate with the Company in good faith in order effectively
          to contest such claim; and

               (4) permit the Company to participate in any proceedings relating
          to such claim;

     provided, however, that the Company shall bear and pay directly all costs
     and expenses (including interest and penalties) incurred in connection with
     such contest and shall indemnify and hold harmless the Executive, on an
     after-tax basis, for and against any Excise Tax or income tax, including
     interest and penalties with respect thereto, imposed as a result of such
     representation and payment of costs and expenses. Without limiting the
     foregoing provisions of this Subsection, the Company shall control all
     proceedings taken in connection with the contest of any claim contemplated
     by this Subsection and, at its sole option, may pursue or forego any and
     all administrative appeals, proceedings, hearings and conferences with the
     taxing authority in respect of such claim (provided, however, that the
     Executive may participate therein at his own cost and expense) and may, at
     its option, either direct the Executive to pay the tax claimed and sue for
     a refund or contest the claim in any permissible manner, and the Executive
     agrees to prosecute such contest to a determination before any
     administrative tribunal, in a court of initial jurisdiction and in one or
     more appellate courts, as the Company shall determine; provided, however,
     that if the Company directs the Executive to pay the tax claimed and sue
     for a refund, the Company shall advance the amount of such payment to the
     Executive on an interest-free basis and shall indemnify and hold the
     Executive harmless, on an after-tax basis, from any Excise Tax or income or
     other tax, including interest or penalties with respect thereto, imposed
     with respect to such advance; and provided further, however, that any
     extension of the statute of limitations relating to payment of taxes for
     the taxable year of the Executive with respect to which the contested
     amount is claimed to be due is limited solely to such contested amount.
     Furthermore, the Company's control of any such contested claim shall be
     limited to issues with respect to which a Gross-Up Payment would be payable
     hereunder and the Executive shall be entitled to settle or contest, as the
     case may be, any other issue raised by the Internal Revenue Service or any
     other taxing authority.

                                       11
<PAGE>   14

          (7) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Subsection (f) of this Section, the Executive receives
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Subsection (f) of this Section)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section (f) of this Section, a determination is made that the Executive shall
not be entitled to any refund with respect to such claim and the Company does
not notify the Executive in writing of its intent to contest such denial or
refund prior to the expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of any such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid by the Company to the Executive pursuant
to this Section.

          7. NO MITIGATION OBLIGATION. The Company hereby acknowledges that it
will be difficult and may be impossible for an Executive to find reasonably
comparable employment following his termination of employment with the Company
and the Subsidiaries and that the non-competition agreement required by Section
9 will further limit the employment opportunities for an Executive. In addition,
the Company acknowledges that its severance pay plans applicable in general to
its salaried employees do not provide for mitigation, offset or reduction of any
severance payment received thereunder. Accordingly, the provision of Severance
Compensation by the Company to an Executive in accordance with the terms of the
Plan is hereby acknowledged by the Company to be reasonable, and an Executive
will not be required to mitigate the amount of any payment provided for in the
Plan by seeking other employment or otherwise, nor will any profits, income,
earnings or other benefits from any source whatsoever create any mitigation,
offset, reduction or any other obligation on the part of an Executive hereunder
or otherwise, except as expressly provided in the last sentence of Paragraph
2(a)(iii) of Exhibit A.

          8. CERTAIN PAYMENTS NOT CONSIDERED FOR OTHER BENEFITS, ETC. The
Gross-up Payment, legal fee and expense reimbursement provided under Section 11
and reimbursements for outplacement counseling provided under Paragraph 6 of
Exhibit A will not be included as earnings for the purpose of calculating
contributions or benefits under any employee benefit plan of the Company. Such
payments and payments of Severance Pay will not be made from any benefit plan
funds, and shall constitute an unfunded unsecured obligation of the Company.

          9. CONFIDENTIALITY; CONFIDENTIAL INFORMATION; NONCOMPETITION. Receipt
of Severance Compensation by an Executive is conditioned upon the Executive
executing and delivering to the Company a confidentiality and non-compete
agreement substantially in the form provided in Exhibit B for the period
specified on Exhibit A.

          10. RELEASE. Receipt of Severance Compensation by an Executive is
conditioned upon the Executive executing and delivering to the Company a release
substantially in the form provided in Exhibit C.

                                       12
<PAGE>   15

          11. LEGAL FEES AND EXPENSES.

          (1) It is the intent of the Company that the Executive not be required
to incur legal fees and the related expenses associated with the interpretation,
enforcement or defense of Executive's rights under the Plan by litigation or
otherwise because the cost and expense thereof would substantially detract from
the benefits intended to be extended to the Executive hereunder. Accordingly, if
it should appear to the Executive that the Company has failed to comply with any
of its obligations under the Plan or in the event that the Company or any other
person takes or threatens to take any action to declare the Plan void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive hereunder, the Company irrevocably
authorizes the Executive from time to time to retain counsel of Executive's
choice, at the expense of the Company as hereafter provided, to advise and
represent the Executive in connection with any such interpretation, enforcement
or defense, including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
Director, officer, stockholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to the Executive's entering into an attorney-client relationship with
such counsel, and in that connection the Company and the Executive agree that a
confidential relationship shall exist between the Executive and such counsel.
Without respect to whether the Executive prevails, in whole or in part, in
connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys' and related fees and expenses
incurred by the Executive in connection with any of the foregoing; provided
that, in regard to such matters, the Executive has not acted in bad faith or
with no colorable claim of success.

          (2) To ensure that the provisions of this Agreement can be enforced by
the Executive, certain trust arrangements ("Trusts") have been established
between KeyTrust Company of Ohio, N.A., as Trustee ("Trustee"), and the Company.
Each of Trust Agreement No. 1 (Amended and Restated Effective June 1, 1997)
("Trust Agreement No. 1"), Trust Agreement No. 2 (Amended and Restated Effective
June 1, 1997) ("Trust Agreement No. 2"), and Trust Agreement No. 7 dated April
9, 1991, as amended ("Trust Agreement No. 7"), as it may be subsequently amended
and/or restated, between the Trustee and the Company, sets forth the terms and
conditions relating to payment from Trust Agreement No. 1 of compensation,
pension benefits and other benefits pursuant to the Plan owed by the Company,
payment from Trust Agreement No. 2 for attorneys' fees and related fees and
expenses pursuant to Section 11(a) hereof owed by the Company, and payment from
Trust Agreement No. 7 of pension benefits owed by the Company. Executive shall
make demand on the Company for any payments due Executive pursuant to Section
11(a) hereof prior to making demand therefor on the Trustee under Trust
Agreement No. 2.

          (3) Upon the earlier to occur of (i) a Change in Control or (ii) a
declaration by the Board that a Change Control is imminent, the Company shall
promptly to the extent it has not previously done so, and in any event within
five (5) business days:

                                       13
<PAGE>   16

          (1) transfer to Trustee to be added to the principal of the Trust
     under Trust Agreement No. 1 a sum equal to (I) the present value on the
     date of the Change in Control (or on such fifth business day if the Board
     has declared a Change in Control to be imminent) of the payments to be made
     to each Executive under the provisions of Annex A and Section 6 hereof,
     such present value to be computed using the assumptions set forth in Annex
     A hereof and the computations provided for in Section 6 hereof less (II)
     the balance in the Executives' accounts provided for in Trust Agreement No.
     1 as of the most recent completed valuation thereof, as certified by the
     Trustee under Trust Agreement No. 1 less (III) the balance in the
     Executives' accounts provided for in Trust Agreement No. 7 as of the most
     recently completed valuation thereof, as certified by the Trustee under
     Trust Agreement No. 7; provided, however, that if the Trustee under Trust
     Agreement No. 1 and/or Trust Agreement No. 7 does not so certify by the end
     of the fourth (4th) business day after the earlier of such Change in
     Control or declaration, then the balance of such respective accounts shall
     be deemed to be zero. Any payments of compensation, pension or other
     benefits by the Trustee pursuant to Trust Agreement No. 1 or Trust
     Agreement No. 7 shall, to the extent thereof, discharge the Company's
     obligation to pay compensation, pension and other benefits hereunder, it
     being the intent of the Company that assets in such Trusts be held as
     security for the Company's obligation to pay compensation, pension and
     other benefits under this Plan; and

          (2) transfer to the Trustee to be added to the principal of the Trust
     under Trust Agreement No. 2 the sum of TWO HUNDRED FIFTY THOUSAND DOLLARS
     ($250,000) less any principal in such Trust on such fifth business day. Any
     payments of the Executive's attorneys' and related fees and expenses by the
     Trustee pursuant to Trust Agreement No. 2 shall, to the extent thereof,
     discharge the Company's obligation hereunder, it being the intent of the
     Company that assets in such Trust be held as security for the Company's
     obligation under Section 11(a) hereof. The entire corpus of the Trust under
     Trust Agreement No. 2 will be $250,000 and said amount will be available to
     discharge not only the obligations of the Company to Executive under
     Section 11(a) hereof, but also similar obligations of the Company to other
     executives and employees under similar provisions of other agreements and
     plans.

          12. EMPLOYMENT RIGHTS. Nothing expressed or implied in the Plan shall
create any right or duty on the part of the Company, a Subsidiary or an
Executive to have the Executive remain in the employment of the Company or a
Subsidiary at any time prior to or following a Change in Control. Any
termination of employment of the Executive or the removal of the Executive from
the office or position in the Company or a Subsidiary prior to a Change in
Control but following the commencement of any discussion with any third person
that ultimately results in a Change in Control shall be deemed to be a
termination or removal of the Executive after a Change in Control for all
purposes of the Plan.

                                       14
<PAGE>   17

          13. WITHHOLDING OF TAXES. The Company may withhold from any amounts
payable under the Plan all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.

          14. SUCCESSORS AND BINDING EFFECT.

          (1) The Company shall require any successor, (including without
limitation any persons acquiring directly or indirectly all or substantially all
of the business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise, and such successor shall thereafter
be deemed the Company for the purposes of the Plan), to assume and agree to
perform the obligations under the Plan in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place.
The Plan shall be binding upon and inure to the benefit of the Company and any
successor to the Company, but shall not otherwise be assignable, transferable or
delegable by the Company.

          (2) The rights under the Plan shall inure to the benefit of and be
enforceable by each Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.

          (3) The rights under the Plan are personal in nature and neither the
Company nor any Executive shall, without the consent of the other, assign,
transfer or delegate the Plan or any rights or obligations hereunder except as
expressly provided in this Section. Without limiting the generality of the
foregoing, an Executive's right to receive payments hereunder shall not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest or otherwise, other than by a transfer by his or her will or by the
laws of descent and distribution and, in the event of any attempted assignment
or transfer contrary to this Section, the Company shall have no liability to pay
any amount so attempted to be assigned, transferred or delegated.

          (4) The obligation of the Company to make payments and/or provide
benefits hereunder shall represent an unsecured obligation of the Company.

          (5) The Company recognizes that each Executive will have no adequate
remedy at law for breach by the Company of any of the agreements contained
herein and, in the event of any such breach, the Company hereby agrees and
consents that each Executive shall be entitled to a decree of specific
performance, mandamus or other appropriate remedy to enforce performance of
obligations of the Company under the Plan.

          15. GOVERNING LAW. The validity, interpretation, construction and
performance of the Plan shall be governed by the laws of the State of Ohio,
without giving effect to the principals of conflict of laws of such State.

                                       15
<PAGE>   18

          16. VALIDITY. If any provisions of the Plan or the application of any
provision hereof to any person or circumstance is held invalid, unenforceable or
otherwise illegal, the remainder of the Plan and the application of such
provision to any other person or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.

          17. CAPTIONS. The captions in the Plan are for convenience of
reference only and do not define, limit or describe the scope or intent of the
Plan or any part hereof and shall not be considered in any construction hereof.

          18. CONSTRUCTION. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender and the singular shall be deemed
to include the plural, unless the context clearly indicates to the contrary.

          19. ADMINISTRATION OF THE PLAN.

               (1) IN GENERAL: The Plan shall be administered by the Company,
which shall be the named fiduciary under the Plan.

               (2) DELEGATION OF DUTIES: The Company may delegate any of its
administrative duties, including, without limitation, duties with respect to the
processing, review, investigation, approval and payment of Severance Pay and
Gross-up Payments, to named administrator or administrators.

               (3) REGULATIONS: The Company shall promulgate any rules and
regulations it deems necessary in order to carry out the purposes of the Plan or
to interpret the terms and conditions of the Plan; provided, however, that no
rule, regulation or interpretation shall be contrary to the provisions of the
Plan.

               (4) CLAIMS PROCEDURE: Subject to the provisions of Section 6, the
Company shall determine the rights of any employee of the Company to any
Severance Compensation or a Gross-up Payment hereunder. Any employee or former
employee of the Company or a Subsidiary who believes that he has not received
any benefit under the Plan to which he believes he is entitled, may file a claim
in writing with the Vice President Human Resources. The Company shall, no later
than 90 days after the receipt of a claim, either allow or deny the claim by
written notice to the claimant. If a claimant does not receive written notice of
the Company's decision on his claim within such 90-day period, the claim shall
be deemed to have been denied in full.

A denial of a claim by the Company, wholly or partially, shall be written in a
manner calculated to be understood by the claimant and shall include:

               (1) the specific reason or reasons for the denial;

                                       16
<PAGE>   19

               (2) specific reference to pertinent Plan provisions on which the
          denial is based;

               (3) a description of any additional material or information
          necessary for the claimant to perfect the claim and an explanation of
          why such material or information is necessary; and

               (4) an explanation of the claim review procedure.

A claimant whose claim is denied (or his duly authorized representative) may,
within 30 days after receipt of denial of his claim, request a review of such
denial by the Company by filing with the Secretary of the Company a written
request for review of his claim. If the claimant does not file a request for
review with the Company within such 30-day period, the claimant shall be deemed
to have acquiesced in the original decision of the Company on his claim. If a
written request for review is so filed within such 30-day period, the Company
shall conduct a full and fair review of such claim. During such full review, the
claimant shall be given the opportunity to review documents that are pertinent
to his claim and to submit issues and comments in writing. The Company shall
notify the claimant of its decision on review within 60 days after receipt of a
request for review. Notice of the decision on review shall be in writing. If the
decision on review is not furnished to the claimant within such 60-day period,
the claim shall be deemed to have been denied on review.

               (5) REVOCABILITY OF ACTION: Any action taken by the Company with
respect to the rights or benefits under the Plan of any Executive shall be
revocable by the Company as to payments or distributions not yet made to such
person, and acceptance of Severance Pay or a Gross-up Payment under the Plan
constitutes acceptance of and agreement to the Company making any appropriate
adjustments in future payments or distributions to such person to offset any
excess or underpayment previously made to him.

               (6) REQUIREMENT OF RECEIPT: Upon receipt of any Severance
Compensation or a Gross-up Payment hereunder, the Company reserves the right to
require any Executive to execute a receipt evidencing the amount and payment of
such Severance Compensation and/or Gross-up Payment.

          20. AMENDMENT AND TERMINATION. The Company reserves the right, except
as hereinafter provided, at any time and from time to time, to amend, modify,
change or terminate the Plan and/or any Committee Action, including any Exhibit
thereto; provided, however, that any such amendment, modification, change or
termination that adversely affects the rights of any Executive who benefits from
Section 4(c) of the Plan may not be made without the written consent of such
Executive; and provided, further, however, that after the occurrence of a Change
in Control any such amendment, modification, change or termination that
adversely affects the rights of any Executive under the Plan may not be made
without the written consent of any such Executive.

          21. OTHER PLANS, ETC. If the terms of this Plan are inconsistent with
the provisions of any other plan, program, contract or arrangement of the
Company or any Subsidiary, to the extent such

                                       17
<PAGE>   20

plan, program, contract or arrangement may be amended by the Company or a
Subsidiary, the terms of the Plan will be deemed to so amend such plan, program,
contract or arrangement, and the terms of the Plan will govern. The Plan
supersedes and replaces the Cleveland-Cliffs Inc Key Employee Severance Pay
Plan, which is terminated effective January 1, 2000.

          IN WITNESS WHEREOF, Cleveland-Cliffs Inc has caused the Plan to be
executed this ___ day of February, 2000.

                                      CLEVELAND-CLIFFS INC

                                      By:  /s/ Richard F. Novak
                                          --------------------------------------
                                      Its: Vice President - Human Resources
                                          --------------------------------------

                                       18
<PAGE>   21

                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

                                    EXHIBIT A

                             SEVERANCE COMPENSATION

     1.   PROVISIONS APPLICABLE TO EXECUTIVES WHO ARE SENIOR VICE PRESIDENTS,
          VICE PRESIDENTS, CONTROLLER AND SECRETARY:

          (1) A lump sum payment in an amount equal to two times the sum of (A)
Base Pay (at the highest rate in effect for any period prior to the Executive's
date of termination), plus (B) Incentive Pay (in an amount equal to not less
than the greater of (i) the target bonus and/or target award opportunity for the
fiscal year immediately preceding the year in which the Change in Control
occurred, or (ii) the target bonus and/or target award opportunity for the
fiscal year in which the Executive's date of termination occurs).

          (2) For a period of 24 months following the Executive's date of
termination (the "Continuation Period"), the Company will arrange to provide the
Executive with Employee Benefits that are welfare benefits (but not stock
option, performance share, performance unit, stock purchase, stock appreciation
or similar compensatory benefits) substantially similar to those that the
Executive was receiving or entitled to receive immediately prior to the
Executive's date of termination (or, if greater, immediately prior to the
reduction, termination, or denial described in Section 4(c)(ii) or Section
4(d)(i)). If and to the extent that any benefit described in this Paragraph 2 is
not or cannot be paid or provided under any policy, plan, program or arrangement
of the Company or any Subsidiary, as the case may be, then the Company will
itself pay or provide for the payment to the Executive, his dependents and
beneficiaries, of such Employee Benefits along with, in the case of any benefit
described in this Paragraph 2 which is subject to tax because it is not or
cannot be paid or provided under any such policy, plan, program or arrangement
of the Company or any Subsidiary, an additional amount such that after payment
by the Executive, or his dependents or beneficiaries, as the case may be, of all
taxes so imposed, the recipient retains an amount equal to such taxes.
Notwithstanding the foregoing, or any other provision of the Plan, for purposes
of determining the period of continuation coverage to which the Executive or any
of his dependents is entitled pursuant to Section 4980B of the Code (or any
successor provision thereto) under the Company's medical, dental and other group
health plans, or successor plans, the Executive's "qualifying event" shall be
the termination of the Continuation Period and the Executive shall be considered
to have remained actively employed on a full-time basis through that date.
Without otherwise limiting the purposes or effect of Section 5, Employee
Benefits otherwise receivable by the Executive pursuant to this Paragraph 2 will
be reduced to the extent comparable welfare benefits are actually received by
the Executive from another employer during the Continuation Period following the
Executive's date of termination, and any such benefits actually received by the
Executive shall be reported by the Executive to the Company.

                                      A-1
<PAGE>   22

     2. PROVISIONS APPLICABLE TO EXECUTIVES WHO ARE MINE GENERAL MANAGERS:

          (1) A lump sum payment in an amount equal to one times the sum of (A)
Base Pay (at the highest rate in effect for any period prior to the Executive's
date of termination), plus (B) Incentive Pay (in an amount equal to not less
than the greater of (i) the target bonus and/or target award opportunity for the
fiscal year immediately preceding the year in which the Change in Control
occurred, or (ii) the target bonus and/or target award opportunity for the
fiscal year in which the Executive's date of termination occurs).

          (2) For a period of 12 months following the Executive's date of
termination (the "Continuation Period"), the Company will arrange to provide the
Executive with Employee Benefits that are welfare benefits (but not stock
option, performance share, performance unit, stock purchase, stock appreciation
or similar compensatory benefits) substantially similar to those that the
Executive was receiving or entitled to receive immediately prior to the
Executive's date of termination (or, if greater, immediately prior to the
reduction, termination, or denial described in Section 4(c)(ii) or Section
4(d)(i)). If and to the extent that any benefit described in this Paragraph 2 is
not or cannot be paid or provided under any policy, plan, program or arrangement
of the Company or any Subsidiary, as the case may be, then the Company will
itself pay or provide for the payment to the Executive, his dependents and
beneficiaries, of such Employee Benefits along with, in the case of any benefit
described in this Paragraph 2 which is subject to tax because it is not or
cannot be paid or provided under any such policy, plan, program or arrangement
of the Company or any Subsidiary, an additional amount such that after payment
by the Executive, or his dependents or beneficiaries, as the case may be, of all
taxes so imposed, the recipient retains an amount equal to such taxes.
Notwithstanding the foregoing, or any other provision of the Plan, for purposes
of determining the period of continuation coverage to which the Executive or any
of his dependents is entitled pursuant to Section 4980B of the Code (or any
successor provision thereto) under the Company's medical, dental and other group
health plans, or successor plans, the Executive's "qualifying event" shall be
the termination of the Continuation Period and the Executive shall be considered
to have remained actively employed on a full-time basis through that date.
Without otherwise limiting the purposes or effect of Section 5, Employee
Benefits otherwise receivable by the Executive pursuant to this Paragraph 2 will
be reduced to the extent comparable welfare benefits are actually received by
the Executive from another employer during the Continuation Period following the
Executive's date of termination, and any such benefits actually received by the
Executive shall be reported by the Executive to the Company.

          3. PROVISIONS APPLICABLE TO ALL EXECUTIVES:

          (1) A lump sum payment (the "SRP Payment") in an amount equal to the
sum of the future pension benefits (converted to a lump sum of actuarial
equivalence) which the Executive would have been entitled to receive two years
following the Executive's date of termination of employment, under the SRP, and
as modified by this Paragraph (3) (assuming Base Salary and Incentive Pay as
determined in Paragraph (1), if the Executive had remained in the full-time

                                      A-2
<PAGE>   23

employment of the Company until two years following the Executive's date of
termination of employment.

The calculation of the SRP Payment and its actuarial equivalence shall be made
as of the Executive's date of termination. The lump sum of actuarial equivalence
shall be calculated as of two years following the Executive's date of
termination of employment using the assumptions and factors used in the SRP, and
such sums shall be discounted to the date of payment using a discount rate
prescribed for purposes of valuation computations under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision thereto, or if no rate is so prescribed, a rate equal to the then
"applicable interest rate" under Section 417 (e)(3)(A) (ii)(II) of the Code.

The Company hereby waives the discretionary right, at any time subsequent to the
date of a Change in Control, to amend or terminate the SRP as to the Executive
as provided in paragraph 8 thereof or to terminate the rights of the Executive
or his beneficiary under the SRP in the event Executive engages in a competitive
business as provided in any plan or arrangement between the Company and the
Executive or applicable to the Executive, including but not limited to, the
provisions of paragraph 4 of the SRP, or any similar provisions of any such plan
or arrangement or other plan or arrangement supplementing or superseding the
same. This Paragraph (3) shall constitute a "Supplemental Agreement" as defined
in Paragraph 1.J of the SRP. If the Company shall terminate the Executive's
employment during the Severance Period, other than for Cause as defined in
Section 3(c)(i), 3(c)(ii) or 3(c)(iii) of the Plan, or if the Executive shall
terminate his employment pursuant to Section 4(c) or Section 4(d) of the Plan,
or if, following the end of the Severance Period, the Executive's employment is
terminated for any reason, for the purposes of computing the Executive's period
of continuous service and of calculating and paying his benefit under the SRP:

               (A) At the time of his termination of employment with the Company
          (by death or otherwise), the Executive shall be credited with years of
          continuous service for benefit accrual and eligibility equal to the
          greater of (i) the number of his actual years of continuous service or
          (ii) the number of years of continuous service he would have had if he
          had continued his employment with the Company until the expiration of
          the second anniversary of his termination of employment, and had he
          attained the greater of (iii) his actual chronological age, (iv)
          sixty-five, or (v) his chronological age at the expiration of the
          second anniversary of his termination of employment. In addition, the
          Executive shall be eligible for a 30-year pension benefit based upon
          his years of continuous service as computed under the preceding
          sentence. Such Executive shall be eligible to commence the 30-year
          pension benefit on the earlier of (vi) the date upon which the
          Executive would have otherwise reached 30 years of continuous service
          with the Company but for his termination of employment after the
          Change in Control at which time the Executive shall be deemed to be
          age 65, or (vii) the date upon which the sum of the Executive's years
          of continuous service (as computed in the first sentence of this
          subparagraph (A)) and the Executive's Credited Years of Industry
          Service is equal to 30 years of service, at which time the Executive
          shall be deemed to be age 65; and

                                      A-3
<PAGE>   24

               (B) The Executive shall be a "Participant" in the SRP,
          notwithstanding any limitations therein. The terms of the Plan and
          this Exhibit A shall take precedence to the extent they are contrary
          to provisions contained in the SRP.

Payment of the SRP Payment by the Company shall be deemed to be a satisfaction
of all obligations of the Company to the Executive under the SRP.

          (4) Base Salary through the Executive's date of termination plus pro
rata Incentive Pay for the year in which the Executive's date of termination
occurs calculated at the greater of (i) the target bonus and/or target
opportunity or (ii) actual performance, in each case for the fiscal year in
which the Executive's date of termination occurs.

          (5) In lieu of the Executive's right to receive deferred compensation
under the Voluntary Non-Qualified Deferred Compensation Plan or any other plan
providing for deferral of amounts otherwise payable to the Executive, a lump sum
payment in cash in an amount equal to 100% of the Executive's cash and stock
account balances under such plans.

          (6) Outplacement services by a firm selected by the Executive, at the
expense of the Company in an amount up to 15% of the Executive's Base Pay.

          (7) Post-retirement, medical, hospital, surgical and prescription drug
coverage for the lifetime of the Executive, his spouse and any eligible
dependents equivalent to that which would have been furnished on the day prior
to a change in control to an officer who retired on such date with full
eligibility for such benefits.

          (8) NON-COMPETE PERIOD. The non-competition period for each Executive
who is a Senior Vice President, a Vice President, Controller or Secretary of the
Company is two (2) years following his termination of employment with the
Company and the Subsidiaries. The non-competition period for each Executive who
is a Mine General Manager of a Subsidiary is one (1) year following his
termination of employment with the Company and the Subsidiaries.

                                      A-4
<PAGE>   25

                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

                                    EXHIBIT B

                FORM OF CONFIDENTIALITY AND NON-COMPETE AGREEMENT

                  WHEREAS, the Executive's employment has been terminated in
accordance with Section 4(b), (c) or (d) of the Cleveland-Cliffs Inc Change in
Control Severance Pay Plan (the "Plan"); and

                  WHEREAS, the Executive is required to sign this
Confidentiality and Non-Compete Agreement ("Agreement") in order to receive the
Severance Compensation (as such term is defined in the Plan) as described in
Exhibit A of the Plan and the other benefits described in the Plan.

                  NOW THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Executive agree as follows:

          1. EFFECTIVE DATE OF AGREEMENT. This Agreement is effective on the
date hereof and will continue in effect as provided herein.

          2. CONFIDENTIALITY; CONFIDENTIAL INFORMATION. In consideration of the
payments to be made and the benefits to be received by the Executive pursuant to
the Plan:

               (a) The Company and the Executive agree that the Company and its
          Subsidiaries have disclosed to Executive their confidential or
          proprietary information (as defined in this Section 2 to the extent
          necessary for Executive to carry out his prior obligations to the
          Company. The Executive hereby covenants and agrees that he will not,
          without the prior written consent of the Company, during the Term or
          thereafter disclose to any person not employed by the Company or a
          Subsidiary, or use in connection with engaging in competition with the
          Company, any confidential or proprietary information of the Company or
          a Subsidiary. For purposes of this Agreement, the term "confidential
          or proprietary information" will include all information of any nature
          and in any form that is owned by the Company and that is not publicly
          available (other than by Executive's breach of this Section 2(a)) or
          generally known to persons engaged in businesses similar or related to
          those of the Company. Confidential or proprietary information will
          include, without limitation, the Company's financial matters,
          customers, employees, industry contracts, strategic business plans,
          product development (or other proprietary product data), marketing
          plans, and all other secrets and all other information of a
          confidential or proprietary nature. For purposes of the preceding two
          sentences, the term "Company" will also include any Subsidiary
          (collectively, the "Restricted Group"). The foregoing obligations
          imposed by this Section 2(a) will not

                                      B-1
<PAGE>   26

          apply (i) if such confidential or proprietary information will have
          become, through no fault of the Executive, generally known to the
          public or (ii) if the Executive is required by law to make disclosure
          (after giving the Company notice and an opportunity to contest such
          requirement).

               (b) The Executive hereby covenants and agrees that during the
          period specified in Section 3, Executive will not, without the prior
          written consent of the Company, which consent shall not unreasonably
          be withheld, on behalf of Executive or on behalf of any person, firm
          or company, directly or indirectly, attempt to influence, persuade or
          induce, or assist any other person in so persuading or inducing, any
          employee of the Restricted Group to give up, or to not commence,
          employment or a business relationship with the Restricted Group.

               (c) The Executive further agrees that he shall return, within 10
          days of the effective date of his termination as an employee of the
          Company and any Subsidiary, in good condition, all property of the
          Company and any Subsidiary then in his possession, including, without
          limitation, whether in hard copy or in media (i) property, documents
          and/or all other materials (including copies, reproductions, summaries
          and/or analyses) which constitute, refer or relate to Confidential
          Information of the Company or any Subsidiary, (ii) keys to property of
          the Company or any Subsidiary, (iii) files and (iv) blueprints or
          other drawings.

               (d) The Executive further acknowledges and agrees that his
          obligation of confidentiality shall survive until and unless such
          Confidential Information of the Company or any Subsidiary shall have
          become, through no fault of the Executive, generally known to the
          public or the Executive is required by law (after providing the
          Company with notice and opportunity to contest such requirement) to
          make disclosure. The Executive's obligations under this Section are in
          addition to, and not in limitation or preemption of, all other
          obligations of confidentiality which the Executive may have to the
          Company and any Subsidiary under general legal or equitable principles
          or statutes.

          3. NON-COMPETE. The Executive agrees that he will not, for a period of
_____ years following his termination with the Company and the Subsidiaries,
engage in Competitive Activity.

          4. NONSOLICITATION. The Executive further agrees that he will not,
directly or indirectly, for a period of ___ years following his termination with
the Company and the Subsidiaries:

               (a) induce or attempt to induce customers, business relations or
          accounts of the Company or any of the Subsidiaries to relinquish their
          contracts or relationships with the Company or any of the
          Subsidiaries; or

               (b) solicit, entice, assist or induce other employees, agents or
          independent contractors to leave the employ of the Company or any of
          the Subsidiaries or to terminate their engagements with the Company
          and/or any of the Subsidiaries or assist any competitors

                                      B-2
<PAGE>   27

          of the Company or any of the Subsidiaries in securing the services of
          such employees, agents or independent contractors.

          5. DEFINITIONS. Where the following words and phrases appear in this
Agreement, they have the respective meanings set forth below, unless their
context clearly indicates otherwise:
          (a) "Competitive Activity" means the Executive's participation,
without the written consent of an officer of the Company, in the management of
any business enterprise if such enterprise engages in substantial and direct
competition with the Company or any Subsidiary and such enterprise's sales of
any product or service competitive with any product or service of the Company or
any Subsidiary amounted to 5% of such enterprise's net sales for its most
recently completely fiscal year and if the Company's net sales of said product
or service amounted to 5% of, as applicable, the Company's or Subsidiary's net
sales for its most recently completed fiscal year. "Competitive Activity" will
not include (i) the mere ownership of 5% or more of securities in any such
enterprise and the exercise of rights appurtenant thereto or (ii) participation
in the management of any such enterprise other than in connection with the
competitive operations of such enterprise.

          (b) "Subsidiary" means any entity in which the Company directly or
indirectly owns more than 50% or more of the outstanding capital or profits
interests or Voting Stock.

          (c) "Voting Stock" means securities entitled to vote generally in the
election of directors.

          IN WITNESS WHEREOF, the Executive has executed and delivered this
Agreement on the date set forth below.

Dated:
      --------------------------        ----------------------------------------
                                                       Executive

                                      B-3
<PAGE>   28

                              CLEVELAND-CLIFFS INC
                      CHANGE IN CONTROL SEVERANCE PAY PLAN

                                    EXHIBIT C

                                 FORM OF RELEASE

                  WHEREAS, the Executive's employment has been terminated in
accordance with Section 4(b), (c) or (d) of the Cleveland-Cliffs Inc Change in
Control Severance Pay Plan (the "Plan"); and

                  WHEREAS, the Executive is required to sign this Release in
order to receive the Severance Compensation (as such term is defined in the
Plan) as described in Exhibit A of the Plan and the other benefits described in
the Plan.

                  NOW THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Executive agrees as follows:

     1. This Release is effective on the date hereof and will continue in effect
as provided herein.

     2. In consideration of the payments to be made and the benefits to be
received by the Executive pursuant to the Plan, which the Executive acknowledges
are in addition to payments and benefits which the Executive would be entitled
to receive absent the Plan (other than severance pay and benefits under any
other severance plan, policy, program or arrangement sponsored by
Cleveland-Cliffs Inc), the Executive, for himself and his dependents,
successors, assigns, heirs, executors and administrators (and his and their
legal representatives of every kind), hereby releases, dismisses, remises and
forever discharges Cleveland-Cliffs Inc, its predecessors, parents,
subsidiaries, divisions, related or affiliated companies, officers, directors,
stockholders, members, employees, heirs, successors, assigns, representatives,
agents and counsel (the "Company") from any and all arbitrations, claims,
including claims for attorney's fees, demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known
or unknown, which Executive now has or may have had for, upon, or by reason of
any cause whatsoever ("claims"), against the Company, including but not limited
to:

          (a) any and all claims arising out of or relating to Executive's
     employment by or service with the Company and his termination from the
     Company;

          (b) any and all claims of discrimination, including but not limited to
     claims of discrimination on the basis of sex, race, age, national origin,
     marital status, religion or handicap, including, specifically, but without
     limiting the generality of the foregoing, any

                                      C-1
<PAGE>   29

     claims under the Age Discrimination in Employment Act, as amended, Title
     VII of the Civil Rights Act of 1964, as amended, the Americans with
     Disabilities Act, Ohio Revised Code Section 4101.17 and Ohio Revised Code
     Chapter 4112, including Sections 4112.02 and 4112.99 thereof; and

          (c) any and all claims of wrongful or unjust discharge or breach of
     any contract or promise, express or implied.

          3. Executive understands and acknowledges that the Company does not
admit any violation of law, liability or invasion of any of his rights and that
any such violation, liability or invasion is expressly denied. The consideration
provided for this Release is made for the purpose of settling and extinguishing
all claims and rights (and every other similar or dissimilar matter) that
Executive ever had or now may have against the Company to the extent provided in
this Release. Executive further agrees and acknowledges that no representations,
promises or inducements have been made by the Company other than as appear in
the Plan.

          4. Executive further agrees and acknowledges that:

               (a) The release provided for herein releases claims to and
          including the date of this Release;

               (b) He has been advised by the Company to consult with legal
          counsel prior to executing this Release, has had an opportunity to
          consult with and to be advised by legal counsel of his choice, fully
          understands the terms of this Release, and enters into this Release
          freely, voluntarily and intending to be bound;

               (c) He has been given a period of 21 days to review and consider
          the terms of this Release, prior to its execution and that he may use
          as much of the 21 day period as he desires; and

               (d) He may, within 7 days after execution, revoke this Release.
          Revocation shall be made by delivering a written notice of revocation
          to the Vice President Human Resources at the Company. For such
          revocation to be effective, written notice must be actually received
          by the Vice President Human Resources at the Company no later than the
          close of business on the 7th day after Executive executes this
          Release. If Executive does exercise his right to revoke this Release,
          all of the terms and conditions of the Release shall be of no force
          and effect and the Company shall not have any obligation to make
          payments or provide benefits to Executive as set forth in Sections 5,
          6 and 11 of the Plan.

          5. Executive agrees that he will never file a lawsuit or other
complaint asserting any claim that is released in this Release.

                                      C-2
<PAGE>   30

          6. Executive waives and releases any claim that he has or may have to
reemployment after ____________________.

               IN WITNESS WHEREOF, the Executive has executed and delivered this
Release on the date set forth below.

Dated:
      ------------------------          ----------------------------------------
                                                        Executive

                                      C-3<PAGE>   1

                                                                  Exhibit 10(kk)

                              CLEVELAND-CLIFFS INC

                             VOLUNTARY NON-QUALIFIED
                           DEFERRED COMPENSATION PLAN
                  (AMENDED AND RESTATED AS OF JANUARY 1, 1999)

<PAGE>   2

                                TABLE OF CONTENTS
                                -----------------

                                                                          PAGE
                                    ARTICLE I

                                     PURPOSE

  1.1      STATEMENT OF PURPOSE; EFFECTIVE DATE............................ 1

                                   ARTICLE II

                                   DEFINITIONS

  2.1      ACCOUNT......................................................... 1
  2.2      BASE SALARY..................................................... 1
  2.3      BENEFICIARY..................................................... 2
  2.4      BOARD........................................................... 2
  2.5      BONUS........................................................... 2
  2.6      CASH AWARD...................................................... 2
  2.7      CASH DIVIDEND BENEFIT........................................... 2
  2.8      CHANGE IN CONTROL............................................... 2
  2.9      CODE............................................................ 3
  2.10     COMMITTEE....................................................... 3
  2.11     COMPANY......................................................... 3
  2.12     COMPENSATION.................................................... 3
  2.13     DECLARED RATE................................................... 3
  2.14     DEFERRAL ACCOUNT................................................ 3
  2.15     DEFERRAL BENEFIT................................................ 3
  2.16     DEFERRED SHARE AWARD ACCOUNT.................................... 4
  2.17     DEFERRED SHARE AWARD BENEFIT.................................... 4
  2.18     DETERMINATION DATE.............................................. 4
  2.19     ELIGIBLE EMPLOYEE............................................... 4
  2.20     EMERGENCY BENEFIT............................................... 4
  2.21     EMPLOYER........................................................ 4
  2.22     EMPLOYMENT AGREEMENT............................................ 4
  2.23     EMPLOYMENT AGREEMENT CONTRIBUTION............................... 4
  2.24     FAIR MARKET VALUE............................................... 4
  2.25     MATCHING ACCOUNT................................................ 4
  2.26     MATCHING AMOUNT................................................. 5
  2.27     MATCHING PERCENTAGE............................................. 5
  2.28     1992 INCENTIVE EQUITY PLAN.......................................5
  2.29     PARTICIPANT..................................................... 5
  2.30     PARTICIPATION AGREEMENT......................................... 5
  2.31     PLAN............................................................ 5
  2.32     PLAN YEAR....................................................... 5
  2.33     SAVINGS PLAN.................................................... 5
  2.34     SELECTED AFFILIATE.............................................. 5

                                       i
<PAGE>   3

  2.35     SHARE........................................................... 5
  2.36     SHARE AWARD..................................................... 5
  2.37     UNIT............................................................ 5

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

  3.1      ELIGIBILITY..................................................... 6
  3.2      PARTICIPATION................................................... 6
  3.3      TERMINATION OF PARTICIPATION.................................... 6
  3.4      INELIGIBLE PARTICIPANT.......................................... 6

                                   ARTICLE IV

             DEFERRAL OF COMPENSATION, CASH AWARDS AND SHARE AWARDS

  4.1      DEFERRAL OF COMPENSATION........................................ 7
  4.2      MATCHING AMOUNTS................................................ 7
  4.3      DEFERRAL OF CASH AWARDS......................................... 7
  4.4      CREDITING DEFERRED COMPENSATION, MATCHING AMOUNTS, CASH AWARDS
           AND EMPLOYMENT AGREEMENT CONTRIBUTIONS.......................... 8
  4.5      DEFERRAL OF SHARE AWARDS........................................ 8
  4.6      CREDITING OF DEFERRED SHARE AWARDS.............................. 8

                                    ARTICLE V

                                BENEFIT ACCOUNTS

  5.1      INVESTMENT OF DEFERRAL AND MATCHING ACCOUNTS.................... 8
  5.2      DETERMINATION OF ACCOUNT........................................ 9
  5.3      CREDITING OF INTEREST........................................... 9
  5.4      DETERMINATION OF DEFERRED SHARE AWARD ACCOUNT................... 9
  5.5      CREDITING OF DIVIDEND EQUIVALENTS............................... 9
  5.6      STATEMENTS......................................................10
  5.7      VESTING OF ACCOUNT..............................................10

                                   ARTICLE VI

                               PAYMENT OF BENEFITS

  6.1      PAYMENT OF DEFERRAL BENEFIT ON TERMINATION OF SERVICE OR
           DEATH...........................................................10
  6.2      PAYMENT OF DEFERRED SHARE AWARD BENEFIT ON TERMINATION OF
           SERVICE OR DEATH................................................10
  6.3      EMERGENCY BENEFIT...............................................11
  6.4      IN-SERVICE DISTRIBUTION.........................................11
  6.5      FORM OF PAYMENT.................................................12

                                       ii
<PAGE>   4

  6.6      COMMENCEMENT OF PAYMENTS........................................13
  6.7      SPECIAL DISTRIBUTIONS...........................................13
  6.8      SMALL BENEFIT...................................................13

                                   ARTICLE VII

                             BENEFICIARY DESIGNATION

  7.1      BENEFICIARY DESIGNATION.........................................14
  7.2      AMENDMENTS......................................................14
  7.3      NO DESIGNATION..................................................14
  7.4      EFFECT OF PAYMENT...............................................14

                                  ARTICLE VIII

                                 ADMINISTRATION

  8.1      COMMITTEE.......................................................14
  8.2      AGENTS..........................................................14
  8.3      BINDING EFFECT OF DECISIONS.....................................15
  8.4      INDEMNITY OF COMMITTEE..........................................15

                                   ARTICLE IX

                        AMENDMENT AND TERMINATION OF PLAN

  9.1      AMENDMENT.......................................................15
  9.2      TERMINATION.....................................................15

                                    ARTICLE X

                                  MISCELLANEOUS

  10.1     FUNDING.........................................................16
  10.2     NONASSIGNABILITY................................................16
  10.3     LEGAL FEES AND EXPENSES.........................................16
  10.4     WITHHOLDING TAXES...............................................17
  10.5     CAPTIONS........................................................17
  10.6     GOVERNING LAW...................................................17
  10.7     SUCCESSORS......................................................17
  10.8     RIGHT TO CONTINUED SERVICE......................................17
  10.9     PRIOR PLAN PROVISIONS...........................................18

                                     ANNEX A

                                    ARTICLE I

                                       iii
<PAGE>   5

                                  ESTABLISHMENT

  A  1.1  ESTABLISHMENT....................................................A-1
  A  1.2  TERM OF MSAP.....................................................A-1

                                   ARTICLE II

                                   DEFINITIONS

  A  2.1  SPECIAL DEFINITIONS APPLICABLE TO THE MSAP.......................A-1

                                   ARTICLE III

                                  PARTICIPATION

  A  3.1  PARTICIPATION....................................................A-3
  A  3.2  DURATION OF PARTICIPATION........................................A-3

                                   ARTICLE IV

                         DEFERRALS AND VOLUNTARY AMOUNTS

  A  4.1  AMOUNT OF DEFERRAL...............................................A-3
  A  4.2  AUTOMATIC DEFERRALS..............................................A-3

                                    ARTICLE V

                        MATCHING CONTRIBUTIONS AND GRANTS

  A  5.1  MATCHING CONTRIBUTIONS AND GRANTS................................A-3

                                   ARTICLE VI

                              PARTICIPANT ACCOUNTS

  A  6.1  ESTABLISHMENT OF ACCOUNTS........................................A-4
  A  6.2  CREDITING OF DEFERRAL COMMITMENTS AND MATCHING
          CONTRIBUTIONS....................................................A-4
  A  6.3  DETERMINATION OF ACCOUNTS........................................A-4
  A  6.4  ADJUSTMENTS TO ACCOUNTS..........................................A-4
  A  6.5  STATEMENT OF ACCOUNTS............................................A-5
  A  6.6  VESTING OF ACCOUNTS..............................................A-5
  A  6.7  SPECIAL RULE FOR VALUATION OF DEFERRED SHARE ACCOUNT.............A-6

                                   ARTICLE VII

                                       iv
<PAGE>   6

                                  DISTRIBUTIONS

  A  7.1  DISTRIBUTION OF SHARES...........................................A-6
  A  7.2  IN-SERVICE DISTRIBUTION..........................................A-6
  A  7.3  FORM OF DISTRIBUTION.............................................A-7
  A  7.4  SPECIAL DISTRIBUTIONS............................................A-8
  A  7.5  FACILITY OF PAYMENT..............................................A-8
  A  7.6  EMERGENCY BENEFIT................................................A-8
  A  7.7  PAYMENT OF SMALL ACCOUNTS........................................A-8

                                       v
<PAGE>   7

                              CLEVELAND-CLIFFS INC

                             VOLUNTARY NON-QUALIFIED
                           DEFERRED COMPENSATION PLAN
                  (AMENDED AND RESTATED AS OF JANUARY 1, 1999)

                                    ARTICLE I

                                     PURPOSE

          1.1 STATEMENT OF PURPOSE; EFFECTIVE DATE. This is the Cleveland-Cliffs
Inc Voluntary Non-Qualified Deferred Compensation Plan (the "Plan") made in the
form of this Plan and in related agreements between an Employer and certain
management and highly compensated employees. The purpose of the Plan is to
provide management and highly compensated employees of the Employers with the
option to defer the receipt of a portion of their regular compensation, bonuses
or performance shares payable for services rendered to the Employer. In
addition, the Plan contains as Annex A a Management Share Acquisition Program
(the "MSAP"), the purpose of which is to provide designated management employees
with the opportunity to make deferred purchases of shares of the Company's
common stock through deferral of their bonuses. In order to encourage
participation in the MSAP, the Company will provide matching grants for such
deferrals. The MSAP shall be subject to the special terms and conditions
specified in Annex A. It is intended that the Plan will assist in attracting and
retaining qualified individuals to serve as officers and key managers of the
Employers. The Plan, originally effective as of June 1, 1989, as amended, is
amended and restated as of January 1, 1999.

                                   ARTICLE II

                                   DEFINITIONS

          When used in this Plan and initially capitalized, except as may
otherwise be provided in the MSAP, the following words and phrases shall have
the meanings indicated:

          2.1 ACCOUNT. "Account" means the sum of a Participant's Deferral
Account and Matching Account under the Plan.

          2.2 BASE SALARY. "Base Salary" means a Participant's base earnings
paid by an Employer to a Participant without regard to any increases or
decreases in base earnings as a result of an election to defer base earnings
under this Plan, or an election between benefits or cash provided under a plan
of an Employer maintained pursuant to Section 125 or 401(k) of the Code.

          2.3 BENEFICIARY. "Beneficiary" means the person or persons designated
or deemed to be designated by the Participant pursuant to Article VII of the
Plan and of Annex A to receive benefits payable under the Plan in the event of
the Participant's death.

<PAGE>   8

          2.4 BOARD. "Board" means the Board of Directors of the Company.

          2.5 BONUS. "Bonus" means a Participant's annual bonus paid by an
Employer to a Participant under the Cleveland-Cliffs Inc Management Performance
Incentive Plan or Mine Performance Plan without regard to any decreases as a
result of an election to defer all or any portion of a bonus under this Plan, or
an election between benefits or cash provided under a plan of an Employer
maintained pursuant to Section 401(k) of the Code.

          2.6 CASH AWARD. "Cash Award" means any compensation payable in cash to
an Eligible Employee for his or her services to the Company or a Selected
Affiliate pursuant to the Company's 1992 Incentive Equity Plan.

          2.7 CASH DIVIDEND BENEFIT. "Cash Dividend Benefit" means an in-service
distribution described in Section 6.4(c).

          2.8 CHANGE IN CONTROL. "Change in Control" means the occurrence of any
of the following events:

          (i) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
     of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of 30% or more of the combined voting power of the then
     outstanding Voting Stock of the Company; provided, however, that for
     purposes of this Section 1(d)(i), the following acquisitions shall not
     constitute a Change in Control: (A) any issuance of Voting Stock of the
     Company directly from the Company that is approved by the Incumbent Board
     (as defined in Section 1(d)(ii), below), (B) any acquisition by the Company
     of Voting Stock of the Company, (C) any acquisition of Voting Stock of the
     Company by any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any Subsidiary, or (D) any acquisition of
     Voting Stock of the Company by any Person pursuant to a Business
     Combination that complies with clauses (A), (B) and (C) of Section
     1(d)(iii), below; or

          (ii) individuals who, as of the date hereof, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board; provided, however, that any individual becoming a Director
     subsequent to the date hereof whose election, or nomination for election by
     the Company's shareholders, was approved by a vote of at least a majority
     of the Directors then comprising the Incumbent Board (either by a specific
     vote or by approval of the proxy statement of the Company in which such
     person is named as a nominee for director, without objection to such
     nomination) shall be deemed to have been a member of the Incumbent Board,
     but excluding, for this purpose, any such individual whose initial
     assumption of office occurs as a result of an actual or threatened election
     contest (within the meaning of Rule 14a-11 of the Exchange Act) with
     respect to the election or removal of Directors or other actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board; or

          (iii) consummation of a reorganization, merger or consolidation
     involving the Company, a sale or other disposition of all or substantially
     all of the assets of the

                                       2
<PAGE>   9

     Company, or any other transaction involving the Company (each, a "Business
     Combination"), unless, in each case, immediately following such Business
     Combination, (A) all or substantially all of the individuals and entities
     who were the beneficial owners of Voting Stock of the Company immediately
     prior to such Business Combination beneficially own, directly or
     indirectly, more than 55% of the combined voting power of the then
     outstanding shares of Voting Stock of the entity resulting from such
     Business Combination (including, without limitation, an entity which as a
     result of such transaction owns the Company or all or substantially all of
     the Company's assets either directly or through one or more subsidiaries)
     in substantially the same proportions relative to each other as their
     ownership, immediately prior to such Business Combination, of the Voting
     Stock of the Company, (B) no Person (other than the Company, such entity
     resulting from such Business Combination, or any employee benefit plan (or
     related trust) sponsored or maintained by the Company, any Subsidiary or
     such entity resulting from such Business Combination) beneficially owns,
     directly or indirectly, 30% or more of the combined voting power of the
     then outstanding shares of Voting Stock of the entity resulting from such
     Business Combination, and (C) at least a majority of the members of the
     Board of Directors of the entity resulting from such Business Combination
     were members of the Incumbent Board at the time of the execution of the
     initial agreement or of the action of the Board providing for such Business
     Combination; or

          (iv) approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company, except pursuant to a Business
     Combination that complies with clauses (A), (B) and (C) of Section
     1(d)(iii).

          2.9 CODE. "Code" means the Internal Revenue Code of 1986, as amended.

          2.10 COMMITTEE. "Committee" has the meaning set forth in Section 8.1.

          2.11 COMPANY. "Company" means Cleveland-Cliffs Inc and any successor
thereto.

          2.12 COMPENSATION. "Compensation" means the Base Salary and Bonus
payable with respect to an Eligible Employee for each calendar year.

          2.13 DECLARED RATE. "Declared Rate" for any period means the Moody's
Corporate Average Bond Yield, as adjusted on the first business day of each
January, April, July and October.

          2.14 DEFERRAL ACCOUNT. "Deferral Account" means the account maintained
on the books of the Employer pursuant to Article V for the purpose of accounting
for (i) the amount of Compensation that a Participant elects to defer under the
Plan, (ii) the portion of a Cash Award that a Participant elects to defer in
cash under the Plan, and (iii) an Employment Agreement Contribution (if any)
made on behalf of a Participant.

          2.15 DEFERRAL BENEFIT. "Deferral Benefit" means the benefit payable to
a Participant or his or her Beneficiary pursuant to Article VI and based on such
Participant's Account.

                                       3
<PAGE>   10

          2.16 DEFERRED SHARE AWARD ACCOUNT. "Deferred Share Award Account"
means the account maintained on the books of the Employer for a Participant
pursuant to Article V.

          2.17 DEFERRED SHARE AWARD BENEFIT. "Deferred Share Award Benefit"
means the benefits payable in Shares to a Participant or his or her Beneficiary
pursuant to Article V and based on such Participant's Deferred Share Award
Account.

          2.18 DETERMINATION DATE. "Determination Date" means a date on which
the amount of a Participant's Account is determined as provided in Article V.
The last business day of each month and any other date selected by the Committee
shall be a Determination Date.

          2.19 ELIGIBLE EMPLOYEE. "Eligible Employee" means a senior corporate
officer of the Company or a full-time salaried employee of an Employer who has a
Management Performance Incentive Plan or Mine Performance Plan Salary Grade
EX-28 or above.

          2.20 EMERGENCY BENEFIT. "Emergency Benefit" has the meaning set forth
in Section 6.3.

          2.21 EMPLOYER. "Employer" means, with respect the Participant, the
Company or the Selected Affiliate which pays such Participant's Compensation.

          2.22 EMPLOYMENT AGREEMENT. "Employment Agreement" means a written
agreement between an Employer and an Eligible Employee that provides for the
deferral of compensation, and that may also provide for vesting, the crediting
of earnings and other terms and conditions with respect to such deferred
compensation.

          2.23 EMPLOYMENT AGREEMENT CONTRIBUTION. "Employment Agreement
Contribution" means any amount contributed to the Plan by an Employer pursuant
to an Employment Agreement.

          2.24 FAIR MARKET VALUE. "Fair Market Value" means the average of the
highest and lowest sales prices of a Share on the specified date (or, if no
Share was traded on such date, on the next preceding date on which it was
traded) as reported in The Wall Street Journal.

          2.25 MATCHING ACCOUNT. "Matching Account" means the account maintained
on the books of an Employer pursuant to Article V for the purpose of accounting
for the Matching Amount for each Participant.

          2.26 MATCHING AMOUNT. "Matching Amount" means the amount credited to a
Participant's Matching Account under Section 4.2.

          2.27 MATCHING PERCENTAGE. "Matching Percentage" means the matching
contribution percentage in effect for a specific Plan Year under the Savings
Plan.

                                       4
<PAGE>   11

          2.28 1992 INCENTIVE EQUITY PLAN. "1992 Incentive Equity Plan" means
the Company's 1992 Incentive Equity Plan (as Amended and Restated as of May 13,
1997).

          2.29 PARTICIPANT. "Participant" means any Eligible Employee who elects
to participate by filing a Participation Agreement as provided in Section 3.2,
or in Annex A.

          2.30 PARTICIPATION AGREEMENT. "Participation Agreement" means the
agreement filed by a Participant, in the form prescribed by the Committee,
pursuant to Section 3.2, or Annex A.

          2.31 PLAN. "Plan" means the Cleveland-Cliffs Inc Voluntary
Non-Qualified Deferred Compensation Plan, as amended from time to time. The Plan
includes Annex A.

          2.32 PLAN YEAR. "Plan Year" means a twelve-month period commencing
January 1 and ending the following December 31.

          2.33 SAVINGS PLAN. "Savings Plan" means, with respect to a
Participant, one or more of the Cliffs and Associated Employers Salaried
Employees Supplemental Retirement Savings Plan and the Northshore Mining Company
and Silver Bay Power Company Retirement Savings Plan for which he or she is
eligible to contribute.

          2.34 SELECTED AFFILIATE. "Selected Affiliate" means (1) any
corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the chain owns or
controls, directly or indirectly, stock possessing not less than 50 per cent of
the total combined voting power of all classes of stock in one of the other
corporations, or (2) any partnership or joint venture in which one or more of
such corporations is a partner or venturer, each of which shall be selected by
the Committee.

          2.35 SHARE. "Share" means a share of common stock of the Company.

          2.36 SHARE AWARD. "Share Award" means any compensation payable in
Shares to an Eligible Employee for his or her services to the Company or a
Selected Affiliate pursuant to the Company's 1992 Incentive Equity Plan,
including Restricted Shares.

          2.37 UNIT. "Unit" means an accounting unit equal in value to one (1)
Share. The number of Units included in any Deferred Share Award Account shall be
adjusted as appropriate to reflect any stock dividend, stock split,
recapitalization, merger, spinoff or other similar event affecting Shares.

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

          3.1 ELIGIBILITY. Eligibility to participate in the Plan for any Plan
Year with respect to deferral of Compensation is limited to those Eligible
Employees who have elected to make the maximum elective contributions permitted
them under the terms of the Savings Plan for

                                       5
<PAGE>   12

such Plan Year. Any Eligible Employee is eligible to participate in the Plan for
any Plan Year with respect to deferral of a Cash Award and/or a Share Award.

          3.2 PARTICIPATION. Participation in the Plan shall be limited to
Eligible Employees who elect to participate in the Plan by filing a
Participation Agreement with the Committee, or on whose behalf an Employment
Agreement Contribution is made to the Plan by an Employer. A properly completed
and executed Participation Agreement shall be filed on or prior to the December
31 immediately preceding the Plan Year in which the Participant's participation
in the Plan will commence. The election to participate shall be effective on the
first day of the Plan Year following receipt by the Committee of the
Participation Agreement. In the event that an Eligible Employee first becomes
eligible to participate in the Plan or first commences employment during the
course of a Plan Year, a Participation Agreement shall be filed with the
Committee not later than 30 days following his eligibility date or date of
employment. Each Participation Agreement shall be effective only with regard to
(i) Compensation, and, with respect to the MSAP, Bonus earned and payable
following the later of the effective date of the Participation Agreement or the
date the Participation Agreement is filed with the Committee, and (ii) a Cash
Award and/or a Share Award the payment of which, if subsequently earned, is not
earlier than the beginning of the second Plan Year following the date the
Participation Agreement is filed with the Committee.

          3.3 TERMINATION OF PARTICIPATION. A Participant may elect to terminate
his or her participation in the Plan by filing a written notice thereof with the
Committee. The termination shall be effective at any time specified by the
Participant in the notice but (i) with respect to deferral of Compensation, and,
with respect to the MSAP, Bonus, not earlier than the first day of the Plan Year
immediately succeeding the Plan Year in which such notice is filed with the
Committee, and (ii) with respect to deferral of a Cash Award and/or a Share
Award, only with respect to a Cash Award and/or a Share Award which becomes
vested not earlier than the last day of the Plan Year which next follows the
Plan Year in which such notice is filed with the Committee. Amounts credited to
such Participant's Account or Deferred Share Award Account with respect to
periods prior to the effective date of such termination shall continue to be
payable pursuant to, receive interest on (where applicable), and otherwise
governed by, the terms of the Plan. Notwithstanding any other provision of this
Article III, a Participant who is actively employed by the Employer and who
elects a distribution pursuant to Section 6.7 shall immediately terminate his or
her participation in the Plan for the balance, if any, of the Plan Year during
which the Participant's election is submitted to the Committee and for the next
two Plan Years.

          3.4 INELIGIBLE PARTICIPANT. Notwithstanding any other provisions of
this Plan to the contrary, if the Committee determines that any Participant may
not qualify as a "management or highly compensated employee" within the meaning
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
regulations thereunder, the Committee may determine, in its sole discretion,
that such Participant shall cease to be eligible to participate in this Plan.
Upon such determination, the Employer shall make an immediate lump sum payment
to the Participant equal to the vested amount credited to his Account and
Deferred Share Award Account. Upon such payment no benefit shall thereafter be
payable under this Plan either to the Participant or any Beneficiary of the
Participant, and all of the Participant's elections as to the time and manner of
payment of his or her Account and Deferred Share Award Account will be deemed to
be canceled.

                                       6
<PAGE>   13

                                   ARTICLE IV

             DEFERRAL OF COMPENSATION, CASH AWARDS AND SHARE AWARDS

          4.1 DEFERRAL OF COMPENSATION. With respect to each Plan Year, a
Participant may elect to defer a specified dollar amount or percentage of his or
her Compensation, provided the amount of Compensation the Participant elects to
defer under this Plan and the Savings Plan shall not exceed, in the aggregate,
the sum of 25% (50% effective January 1, 1997) of his or her Base Salary net of
such Participant's pretax elective deferrals under the Savings Plan, if any,
plus 100% of his or her Bonus. A Participant may choose to have amounts of
Compensation deferred under this Plan deducted from his or her Base Salary,
Bonus or a combination of both. A Participant may change the dollar amount or
percentage of his or her Compensation to be deferred by filing a written notice
thereof with the Committee. Any such change shall be effective as of the first
day of the Plan Year immediately succeeding the Plan Year in which such notice
is filed with the Committee. Notwithstanding the foregoing, any Employment
Agreement Contribution shall be deferred in accordance with the terms of the
Employment Agreement.

          4.2 MATCHING AMOUNTS. An Employer shall provide Matching Amounts under
this Plan with respect to each Participant who is eligible to be allocated
matching contributions under the Savings Plan. The total Matching Amounts under
this Plan on behalf of a Participant for each Plan Year shall not exceed (i) the
Matching Percentage of the Compensation deferred by a Participant under Section
4.1, up to a maximum of 7% of Compensation, less (ii) the Employer matching
contributions allocated to the Participant under the Savings Plan for such Plan
Year.

          4.3 DEFERRAL OF CASH AWARDS. A Participant may elect to defer all or a
specified dollar amount or percentage of his or her Cash Award with respect to a
Plan Year, to be credited to his or her Deferral Account. A Participant may
change the dollar amount or percentage of his or her Cash Award to be deferred
by filing a written notice thereof with the Committee, which shall be effective
only with respect to Cash Awards which become vested not earlier than the last
day of the Plan Year which next follows the Plan Year in which such notice is
filed with the Committee.

          4.4 CREDITING DEFERRED COMPENSATION, MATCHING AMOUNTS, CASH AWARDS AND
EMPLOYMENT AGREEMENT CONTRIBUTIONS.

          (a) The amount of Compensation that a Participant elects to defer
     shall be credited by the Employer to the Participant's Deferral Account as
     of the time such Compensation would otherwise become payable to the
     Participant.
          (b) The amount of the Employment Agreement Contribution (if any)
     contributed for a Participant shall be credited by the Employer to the
     Participant's Deferral Account in accordance with the terms of the
     Employment Agreement.

                                       7
<PAGE>   14

          (c) The amount of any Cash Award that a Participant elects to defer
     shall be credited to the Participant's Deferral Account as of the time such
     Cash Award would otherwise become payable to the Participant.

          (d) The Matching Amount under the Plan for each Participant shall be
     credited by the Employer to the Participant's Matching Account at the same
     time that matching contributions are allocated under the Savings Plan.

          4.5 DEFERRAL OF SHARE AWARDS. A Participant may elect to defer all or
a specified number of Shares, or percentage of his or her Share Award with
respect to a Plan Year, to be credited to his or her Deferred Share Award
Account in Units. A Participant may change the percentage of his or her Share
Awards to be deferred by filing a written notice thereof with the Committee,
which shall be effective only with respect to Share Awards which become vested
not earlier than the last day of the Plan Year which next follows the Plan Year
in which such notice is filed with the Committee. No fractional Shares shall be
deferred, but the number of Shares deferred shall be rounded down to the nearest
whole Share.

          4.6 CREDITING OF DEFERRED SHARE AWARDS. The number of Shares in a
Share Award or percentage of Share Awards that a Participant elects to defer
shall be credited to the Participant's Deferred Share Award Account in Units as
of the time such Share Award would otherwise become payable to the Participant.
The number of Units credited to the Participant's Deferred Share Award Account
shall be equal to the number of Shares of a Participant's Share Award which the
Participant has elected to defer.

                                    ARTICLE V

                                BENEFIT ACCOUNTS

          5.1 INVESTMENT OF DEFERRAL AND MATCHING ACCOUNTS. As soon as
practicable after the crediting of any amount to a Participant's Deferral
Account or Matching Account, the Company may, in its sole discretion, direct
that the Company invest the amount credited, in whole or in part, in such
property (real, personal, tangible or intangible), other than securities of the
Company, (collectively the "Investments"), as the Committee shall direct, or may
direct that the Company retain the amount credited as cash to be added to its
general assets. The Committee may, but is under no obligation to, direct the
investment of amounts credited to a Participant's Deferral Account or Matching
Account in accordance with requests made by the Participant and communicated to
the Committee. Earnings from Investments shall be credited to a Participant's
Deferral Account or Matching Account and shall be reinvested, as soon as
practicable, in the manner provided above. The Company shall be the sole owner
and beneficiary of all Investments, and all contracts and other evidences of the
Investments shall be registered in the name of the Company. The Company, under
the direction of the Committee, shall have the unrestricted right to sell any of
the Investments included in any Participant's Deferral Account or Matching
Account, and the unrestricted right to reinvest the proceeds of the sale in
other Investments or to credit the proceeds of the sale to a Participant's
Deferral Account or Matching Account as cash. Amounts credited to a
Participant's Deferral Account or Matching Account that are not invested in
Investments shall be credited to a Participant's Account as cash.

                                       8
<PAGE>   15

          5.2 DETERMINATION OF ACCOUNT. As of each Determination Date, a
Participant's Account shall consist of the following: (i) the balance of the
Participant's Account as of the immediately preceding Determination Date, plus
(ii) the Participant's deferred Compensation, Matching Amounts, deferred Cash
Awards and Employment Agreement Contribution (if any) credited pursuant to
Section 4.4 since the immediately preceding Determination Date and any earnings
and/or income credited to such amounts pursuant to Sections 5.1 and 5.3 as of
such Determination Date, minus (iii) any losses or other diminution in the value
of assets in such Account since the immediately preceding Determination Date,
minus (iv) the aggregate amount of distributions, if any, made from such
Participant's Account since the immediately preceding Determination Date.

          5.3 CREDITING OF INTEREST. As of each Determination Date, the amounts
credited to a Participant's Account as cash shall be increased by the amount of
interest earned since the immediately preceding Determination Date. Interest
shall be credited at the Declared Rate as of such Determination Date based on
the balance of the cash amounts credited to the Account since the immediately
preceding Determination Date, but after such Account has been adjusted for any
contributions or distributions to be credited or deducted for such period.
Interest for the period prior to the first Determination Date applicable to a
Participant's Account shall be deemed earned ratably over such period.

          5.4 DETERMINATION OF DEFERRED SHARE AWARD ACCOUNT. On any particular
date, a Participant's Deferred Share Award Account shall consist of the
aggregate number of Units credited thereto pursuant to Section 4.6, plus any
dividend equivalents credited pursuant to Section 5.5, minus the aggregate
amount of distributions, if any, made from such Deferred Share Award Account.

          5.5 CREDITING OF DIVIDEND EQUIVALENTS. Each Deferred Share Award
Account shall be credited, as of the payment date of any cash dividend paid on
Shares, with additional Units equal in value to the amount of cash dividends
paid by the Company on that number of Shares equivalent to the Units in such
Deferred Share Award Account on such payment date. Such dividend equivalents
shall be valued using Fair Market Value. A Participant may elect to convert the
Units representing such dividend equivalents to cash to be credited to his or
her Deferral Account by filing a written notice thereof with the Committee,
which shall be effective only with respect to cash dividends paid after the Plan
Year in which such notice is filed with the Committee. Until a Participant or
his or her Beneficiary receives his or her entire Deferred Share Award Account,
the unpaid balance thereof credited in Units shall earn dividend equivalents as
provided in this Section 5.5, except as provided in Section 6.4(c).

          5.6 STATEMENTS. The Committee shall cause to be kept a detailed record
of all transactions affecting each Participant's Account and Deferred Share
Award Account and shall provide to each Participant, within 120 days after the
close of each Plan Year, a written statement setting forth a description of the
Investments and Units in such Participant's Account and Deferred Share Award
Account and the cash balance, if any, of such Participant's Account, as of the
last day of the preceding Plan Year and showing all adjustments made thereto
during such Plan Year.

                                       9
<PAGE>   16

          5.7 VESTING OF ACCOUNT. Subject to the provisions of any Employment
Agreement relating to an Employment Agreement Contribution (if any), a
Participant shall be 100% vested in his or her Account and Deferred Share Award
Account at all times.

                                   ARTICLE VI

                               PAYMENT OF BENEFITS

          6.1 PAYMENT OF DEFERRAL BENEFIT ON TERMINATION OF SERVICE OR DEATH.
Upon the earlier of (i) termination of service of the Participant as an employee
of the Employer and all Selected Affiliates, for reasons other than death, or
(ii) the death of a Participant, the Employer shall, in accordance with this
Article VI, pay to the Participant or his or her Beneficiary, as the case may
be, a Deferral Benefit equal to the balance of his or her vested Account
determined pursuant to Article V, less any amounts previously distributed;
provided, however, that the Participant may by written notice filed with the
Committee at least one (1) year prior to the Participant's voluntary termination
of employment with, or retirement from, the Company and any affiliate of the
Company, whether or not such affiliate is a Selected Affiliate, elect to defer
commencement of the payment of his or her Deferral Benefit until a date selected
in such election. Any such election may be changed by the Participant at any
time and from time to time without the consent of any other person by filing a
later signed written election with the Committee; provided that any election
made less than one (1) year prior to the Participant's voluntary termination of
employment or retirement shall not be valid, and in such case payment shall be
made in accordance with the Participant's prior election, or otherwise in
accordance with the first sentence of this Section 6.1.

          6.2 PAYMENT OF DEFERRED SHARE AWARD BENEFIT ON TERMINATION OF SERVICE
OR DEATH. Upon the earlier of (i) termination of service of the Participant as
an employee of the Employer and all Selected Affiliates, for reasons other than
death, or (ii) the death of a Participant, the Employer shall, in accordance
with this Article VI, pay to the Participant or his or her Beneficiary, as the
case may be, a Deferred Share Award Benefit equal to the balance of the Units in
his or her Deferred Share Award Account determined pursuant to Article V, less
any amounts previously distributed.

          6.3 EMERGENCY BENEFIT. In the event that the Committee, upon written
petition of a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Employer
shall pay to the Participant, as soon as practicable following such
determination, an amount necessary to meet the emergency (the "Emergency
Benefit"), but not exceeding the aggregate balance of such Participant's vested
Deferral Account, Matching Account and Deferred Share Award Account as of the
date of such payment. For purposes of this Section 6.3, an "unforeseeable
financial emergency" shall mean an unexpected need for cash arising from an
illness, disability, casualty loss, sudden financial reversal or other such
unforeseeable occurrence. Cash needs arising from foreseeable events such as the
purchase of a house or education expenses for children shall not be considered
to be the result of an unforeseeable financial emergency. The amount of the
Deferral Benefit and Deferred Share Award Benefit otherwise payable under the
Plan to such Participant shall be adjusted to reflect the early payment of the
Emergency Benefit.

                                       10
<PAGE>   17

          6.4 IN-SERVICE DISTRIBUTION.

          (a) A Participant may elect to receive an in-service distribution of
     his or her deferred Compensation, Matching Amount and earnings thereon with
     respect to a Plan Year beginning at any time at least four years after the
     date such Compensation otherwise would have been first payable. A
     Participant's election for an in-service distribution from his or her
     Account with respect to a Plan Year shall be filed in writing with the
     Committee before the first day of the Plan Year in which his or her
     deferred Compensation otherwise would have been first payable. The
     Participant may elect to receive an in-service distribution as provided in
     Section 6.5(a); provided, however, that Section 6.5(c) shall not apply to
     an in-service distribution. Any Deferral Benefit paid to the Participant as
     an in-service distribution shall reduce the amount of Deferral Benefit
     otherwise payable to the Participant under the Plan.

          (b) A Participant may elect to receive an in-service distribution of
     his or her deferred Share Award and earnings with respect to a Plan Year
     beginning at any time at least four (4) years after the date such deferred
     Share Award otherwise would have been first payable. A Participant's
     election for an in-service distribution from his or her Deferred Share
     Award Account with respect to a Plan Year shall be filed in writing with
     the Committee not later than during the second Plan Year preceding the date
     the Share Award otherwise would have been first payable. The Participant
     may elect to receive such Deferred Share Award Benefit as an in-service
     distribution as provided in Section 6.5(b); provided, however, that Section
     6.5(c) of the Plan shall not apply to such an in-service distribution. Any
     Deferred Share Award Benefit paid to the Participant as an in-service
     distribution shall reduce the amount of Deferred Share Award Benefit
     otherwise payable to the Participant under the Plan.

          (c) A Participant may elect to receive an in-service distribution of
     his or her deferred Cash Award and earnings with a respect to a Plan Year
     beginning at any time at least four (4) years after the date such deferred
     Cash Award otherwise would have been first payable. A Participant's
     election for an in-service distribution from his or her Account with
     respect to a Cash Award for a Plan Year shall be filed in writing with the
     Committee not later during the second Plan Year preceding the date the Cash
     Award otherwise would have been first payable. The Participant may elect to
     receive such Deferral Benefit as an in-service distribution as provided in
     Section 6.5(a); provided, however, that Section 6.5(c) shall not apply to
     such an in-service distribution. Any Deferral Benefit paid to the
     Participant is an in-service distribution shall reduce the amount of
     Deferral Benefits otherwise payable to the Participant under the Plan.
          (d) A Participant may elect to receive an in-service distribution of a
     Cash Dividend Benefit equal to the amount of the dividend equivalent to be
     credited to his or her Deferred Share Award Account pursuant to Section 5.5
     as of the payment date of a cash dividend on Shares. A Participant's
     election for a Cash Dividend Benefit shall be filed in writing with the
     Committee not later than during the second Plan Year preceding the date the
     dividend equivalent otherwise would be so credited to his or her Deferred
     Share Award Account.

                                       11
<PAGE>   18

          6.5 FORM OF PAYMENT.

          (a) The Deferral Benefit payable pursuant to Section 6.1, Section
     6.4(a) or Section 6.4(c) shall be paid in one of the following forms, as
     elected by the Participant in his or her Participation Agreement or by
     written notice as provided in subsection (c) below:

               (1) Annual payments of a fixed amount which shall amortize the
          vested Account balance, or the in-service distribution portion
          thereof, as of the payment commencement date elected by the
          Participant over a period not to exceed fifteen years (together, in
          the case of each payment, with earnings thereon credited after the
          payment commencement date pursuant to Article V).

               (2) A lump sum.

               (3) A combination of (1) and (2) above. The Participant shall
          designate the percentage payable under each option.

Notwithstanding the foregoing, the Committee may, at any time, direct that
installment payments under (1) or (3) above shall be made quarterly.

          (b) The Deferred Share Award Benefit payable pursuant to Section 6.2
     or Section 6.4(b) shall be paid in whole Shares plus cash equal in value to
     any fractional Share in one of the forms set forth in Section 6.5(a),
     without interest, but with dividend equivalents reinvested as provided in
     Section 5.5; subject, however, to Section 6.4(d). For the purpose of this
     Section 6.5(b), each distribution from a Deferred Share Award Account shall
     be valued on the basis of the Fair Market Value of the Shares on the date
     prior to the date payment of such distribution is made.

          (c) The Participant's election of the form of payment shall be made by
     written notice filed with the Committee at least one (1) year prior to the
     Participant's voluntary termination of employment with, or retirement from,
     the Company and any affiliate of the Company, whether or not such affiliate
     is a Selected Affiliate. Any such election may be changed by the
     Participant at any time and from time to time without the consent of any
     other person by filing a later signed written election with the Committee;
     provided that any election made less than one (1) year prior to the
     Participant's voluntary termination of employment or retirement shall not
     be valid, and in such case payment shall be made in accordance with the
     Participant's prior election; and provided, further, that the Committee
     may, in its sole discretion, waive such one (1) year period upon a request
     of the Participant made while an active or inactive employee of the
     Company.

          (d) The amount of each installment under Section 6.5(a) shall be equal
     to the quotient obtained by dividing the Participant's Account balance as
     of the date of such installment payment by the number of installment
     payments remaining to be made to or in respect of such Participant at the
     time of calculation.

                                       12
<PAGE>   19

          (e) The Cash Dividend Benefit payable pursuant to Section 6.4(c) shall
     be in the form of a lump sum.

          (f) If a Participant fails to make an election with respect to his or
     her Account in a timely manner as provided in this Section 6.4,
     distribution shall be made in ten (10) annual installments of cash or
     Shares, as applicable.

          (g) A Participant's Deferral Benefit and Deferred Share Award Benefit
     (or the remaining portions thereof if payment to the Participant had
     commenced) shall be distributed to his or her Beneficiary in the form of a
     single lump sum payment following his or her death.

          6.6 COMMENCEMENT OF PAYMENTS. Commencement of payments under Section
6.1 or Section 6.2 of the Plan shall begin as soon as practicable, and in
accordance with the payment commencement date elected by the Participant,
following receipt of notice by the Committee of an event which entitles a
Participant (or a Beneficiary) to payments under the Plan.

          6.7 SPECIAL DISTRIBUTIONS. Notwithstanding any other provision of this
Article VI, a Participant, whether or not in pay status, may elect to receive a
distribution of part or all of his or her Account or Deferred Share Award
Account in one or more distributions if (and only if) the amount in either of
such accounts subject to such distribution is reduced by six percent (6%). Any
distribution made pursuant to such an election shall be made within 60 days of
the date such election is submitted to the Committee. The remaining six percent
(6%) of the portion of the electing Participant's account subject to such
distribution shall be forfeited.

          6.8 SMALL BENEFIT. In the event the Committee determines that the
balance of the Participant's Account and Deferred Share Award Account is less
than $50,000 at the time of commencement of payments, the Employer may pay the
benefit in the form of a lump sum payment, notwithstanding any provision of the
Plan to the contrary. Such lump sum payment shall be equal to the balance of the
Participant's Account, or the portion thereof payable to a beneficiary.

                                   ARTICLE VII

                             BENEFICIARY DESIGNATION

          7.1 BENEFICIARY DESIGNATION. Each Participant shall have the right, at
any time, to designate any person or persons as his Beneficiary to whom payment
under the Plan shall be made in the event of his or her death prior to complete
distribution to the Participant of his or her Deferral Benefit or Deferred Share
Award Benefit. Any Beneficiary designation shall be made in a written instrument
filed with the Committee and shall be effective only when received in writing by
the Committee.

                                       13
<PAGE>   20

          7.2 AMENDMENTS. Any Beneficiary designation may be changed by a
Participant by the filing of a new Beneficiary designation, which will cancel
all Beneficiary designations previously filed.

          7.3 NO DESIGNATION. If a Participant fails to designate a Beneficiary
as provided above, or if all designated Beneficiaries predecease the
Participant, then the Participant's designated Beneficiary shall be deemed to be
the Participant's estate.

          7.4 EFFECT OF PAYMENT. Payment to a Participant's Beneficiary (or,
upon the death of a Beneficiary, to the Beneficiary's estate) shall completely
discharge the Employer's obligations under the Plan.

                                  ARTICLE VIII

                                 ADMINISTRATION

          8.1 COMMITTEE. The administrative committee for the Plan (the
"Committee") shall be those members of the Compensation Committee of the Board
who are not Participants, as long as there are at least three such members. If
there are not at least three such non-participating persons on the Compensation
Committee, the chief executive officer of the Company shall appoint other
non-participating Directors or Company officers to serve on the Committee. The
Committee shall supervise the administration and operation of the Plan, may from
time to time adopt rules and procedures governing the Plan and shall have
authority to construe and interpret the Plan (including, without limitation, by
supplying omissions from, correcting deficiencies in, or resolving
inconsistencies and ambiguities in, the language of the Plan).

          8.2 AGENTS. The Committee may appoint an individual, who may be an
employee of the Company, to be the Committee's agent with respect to the
day-today administration of the Plan. In addition, the Committee may, from time
to time, employ other agents and delegate to them such administrative duties as
it sees fit, and may from time to time consult with counsel who may be counsel
to the Company.

          8.3 BINDING EFFECT OF DECISIONS. Any decision or action of the
Committee with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan shall be final and
binding upon all persons having any interest in the Plan.

          8.4 INDEMNITY OF COMMITTEE. The Company shall indemnify and hold
harmless the members of the Committee and their duly appointed agents under
Section 8.2 against any and all claims, loss, damage, expense or liability
arising from any action or failure to act with respect to the Plan, except in
the case of gross negligence or willful misconduct by any such member or agent
of the Committee.

                                       14
<PAGE>   21

                                   ARTICLE IX

                        AMENDMENT AND TERMINATION OF PLAN

          9.1 AMENDMENT. The Company, on behalf of itself and of each Selected
Affiliate may at any time amend, suspend or reinstate any or all of the
provisions of the Plan, except that no such amendment, suspension or
reinstatement may adversely affect any Participant's Account or Deferred Share
Award Account, as it existed as of the effective date of such amendment,
suspension or reinstatement, without such Participant's prior written consent.
Written notice of any amendment or other action with respect to the Plan shall
be given to each Participant.

          9.2 TERMINATION. The Company, on behalf of itself and of each Selected
Affiliate, in its sole discretion, may terminate this Plan at any time and for
any reason whatsoever. Upon termination of the Plan, the Committee shall take
those actions necessary to administer any Accounts or Deferred Share Award
Accounts existing prior to the effective date of such termination; provided,
however, that a termination of the Plan shall not adversely affect the value of
a Participant's Account or Deferred Share Award Account, the earnings from
Investments credited to a Participant's Account under Section 5.1, the interest
on cash amounts credited to a Participant's Account under Section 5.3, the
crediting of dividend equivalents to a Participant's Deferred Share Award
Account under Section 5.5, or the timing or method of distribution of a
Participant's Account, or Deferred Share Award Account, without the
Participant's prior written consent.

                                    ARTICLE X

                                  MISCELLANEOUS

          10.1 FUNDING. Participants, their Beneficiaries, and their heirs,
successors and assigns, shall have no secured interest or claim in any property
or assets of the Employer. The Employer's obligation under the Plan shall be
merely that of an unfunded and unsecured promise of the Employer to pay money in
the future. Notwithstanding the foregoing, in the event of a Change in Control,
the Company shall create an irrevocable trust to hold funds to be used in
payment of the obligations of Employers under the Plan, and the Company shall
fund such trust in an amount equal to no less than the total value of the
Participants' Accounts or Deferred Share Award Accounts under the Plan as of the
Determination Date immediately preceding the Change in Control, provided that
any funds contained therein shall remain liable for the claims of the respective
Employer's general creditors.

          10.2 NONASSIGNABILITY. No right or interest under the Plan of a
Participant or his or her Beneficiary (or any person claiming through or under
any of them), other than the surviving spouse of any deceased Participant, shall
be assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner
be liable for or subject to the debts or liabilities of any such Participant or
Beneficiary. If

                                       15
<PAGE>   22

any Participant or Beneficiary (other than the surviving spouse of any deceased
Participant) shall attempt to or shall transfer, assign, alienate, anticipate,
sell, pledge or otherwise encumber his or her benefits hereunder or any part
thereof, or if by reason of his or her bankruptcy or other event happening at
any time such benefits would devolve upon anyone else or would not be enjoyed by
him or her, then the Committee, in its discretion, may terminate his or her
interest in any such benefit to the extent the Committee considers necessary or
advisable to prevent or limit the effects of such occurrence. Termination shall
be effected by filing a written "termination declaration" with the Secretary of
the Company and making reasonable efforts to deliver a copy to the Participant
or Beneficiary whose interest is adversely affected (the "Terminated
Participant").

          As long as the Terminated Participant is alive, any benefits affected
by the termination shall be retained by the Employer and, in the Committee's
sole and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of the Terminated Participant, all
benefits withheld from him or her and not paid to others in accordance with the
preceding sentence shall be disposed of according to the provisions of the Plan
that would apply if he or she died prior to the time that all benefits to which
he or she was entitled were paid to him or her.

          10.3 LEGAL FEES AND EXPENSES. It is the intent of the Company and each
Selected Affiliate that following a Change in Control no Eligible Employee or
former Eligible Employee be required to incur the expenses associated with the
enforcement of his rights under this Plan by litigation or other legal action
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to an Eligible Employee hereunder. Accordingly,
if it should appear that the Employer has failed to comply with any of its
obligations under this Plan or in the event that the Employer or any other
person takes any action to declare this Plan void or unenforceable, or
institutes any litigation designed to deny, or to recover from, the Eligible
Employee the benefits intended to be provided to such Eligible Employee
hereunder, the Employer irrevocably authorizes such Eligible Employee from time
to time to retain counsel of his choice, at the expense of the Employer as
hereafter provided, to represent such Eligible Employee in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Employer or any director, officer, stockholder or other person
affiliated with the Employer in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Employer and such counsel, the
Employer irrevocably consents to such Eligible Employee's entering into an
attorney-client relationship with such counsel, and in that connection the
Employer and such Eligible Employee agree that a confidential relationship shall
exist between such Eligible Employee and such counsel. The Employer shall pay
and be solely responsible for any and all attorneys' and related fees and
expenses incurred by such Eligible Employee as a result of the Employer's
failure to perform under this Plan or any provision thereof; or as a result of
the Employer or any person contesting the validity or enforceability of this
Plan or any provision thereof.

          10.4 WITHHOLDING TAXES. If the Employer is required to withhold any
taxes or other amounts from a Participant's deferred Compensation, Employment
Agreement Contribution, deferred Cash Award or deferred Share Award pursuant to
any state, federal or local law, such amounts shall, to the extent possible, be
withheld from the Participant's Compensation, Cash Award or Share Award before
such amounts are credited under the Plan. Any additional

                                       16
<PAGE>   23

withholding amount required shall be paid by the Participant to the Employer as
a condition to the crediting of deferred Compensation, deferred Cash Award or
deferred Share Award to the Participant's Account and Deferred Share Award
Account, respectively. The Employer may withhold any required state, federal or
local taxes or other amounts from any benefits payable in cash or Shares to a
Participant or Beneficiary.

          10.5 CAPTIONS. The captions contained herein are for convenience only
and shall not control or affect the meaning or construction hereof.

          10.6 GOVERNING LAW. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of Ohio.

          10.7 SUCCESSORS. The provisions of the Plan shall bind and inure to
the benefit of the Company, its selected Affiliates, and their respective
successors and assigns. The term successors as used herein shall include any
corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise, acquire all or substantially all of the
business and assets of the Company or a Selected Affiliate and successors of any
such corporation or other business entity.

          10.8 RIGHT TO CONTINUED SERVICE. Nothing contained herein shall be
construed to confer upon any Eligible Employee the right to continue to serve as
an Eligible Employee of the Employer or in any other capacity.

          10.9 PRIOR PLAN PROVISIONS. The provisions of the Plan in effect prior
to January 1, 1999 shall govern periods prior to such date.

          Executed this ______ day of February, 2000.

                                     CLEVELAND-CLIFFS INC

                                     By:
                                        ----------------------------------------
                                        Vice President-Human Resources

                                       17
<PAGE>   24

                                                                         ANNEX A

                              CLEVELAND-CLIFFS INC

                      MANAGEMENT SHARE ACQUISITION PROGRAM

                              TERMS AND CONDITIONS

                                    ARTICLE I
                                  ESTABLISHMENT

          A 1.1 ESTABLISHMENT.

               (a) This Article contains the following terms and conditions
applicable to the MSAP.

               (b) Grants of Restricted Shares under the MSAP shall be subject
to the terms and conditions set forth in the 1992 Incentive Equity Plan and, to
the extent not inconsistent herewith, the MSAP shall be administered in
accordance with the 1992 Incentive Equity Plan.

          A 1.2 TERM OF MSAP. The MSAP shall terminate upon the earliest of (a)
the termination of the Plan, or (b) the termination by the Company of the MSAP.

                                   ARTICLE II
                                   DEFINITIONS

          A 2.1 SPECIAL DEFINITIONS APPLICABLE TO THE MSAP. Unless provided
otherwise in the MSAP, all capitalized terms shall have the same meanings as set
forth in the Plan. For purposes of the MSAP, the following terms shall be
defined as set forth below:

               "ACCOUNT" means the bookkeeping account maintained for each
          Participant showing his interest under the MSAP. An Account shall
          consist of a "Cash Account," a "Deferred Shares Account" and a
          "Matching Shares Account". The number of Shares in an Account shall be
          adjusted as appropriate to reflect any stock dividend, stock split,
          recapitalization, merger, spinoff or other similar event affecting
          Shares.

               "DATE OF GRANT" means the date specified by the Committee on
          which a grant or sale of Restricted Shares, Matching Shares or
          Deferred Shares shall become effective, which shall not be earlier
          than the date on which the Committee takes action with respect
          thereto.

               "DISABILITY" means a physical or mental condition of the
          Participant resulting from a bodily injury, disease, or mental
          disorder, which renders him incapable continuing

                                      A-0
<PAGE>   25

          in the active employment of the Company or Selected Affiliate (as
          determined by the Committee) based upon appropriate medical advice and
          examination.

               "DEFERRAL COMMITMENT" means an agreement by a Participant in a
          Participation Agreement to have a specified percentage or dollar
          amount of his Bonus deferred under the MSAP for a specified period in
          the future.
               "DEFERRED SHARES" means the Shares notionally credited to a
          Participant's Deferred Shares Account.

               "INSIDER PARTICIPANT" means any Participant who is required to
          file reports with the Securities and Exchange Commission pursuant to
          Section 16(a) of the Exchange Act, and any rules promulgated
          thereunder.

               "MATCHING SHARES" means the notional Shares granted to a
          Participant pursuant to Section A 5.1(a) and credited to his Matching
          Shares Account and/or Restricted Shares granted pursuant to Section A
          5.1(b), as the context requires.

               "QUARTER DATE" means the last day of a calendar quarter.

               "RESTRICTED SHARES" means Shares awarded pursuant to Section 5 of
          the 1992 Incentive Equity Plan.

               "RETIREMENT" means retirement from active employment with the
          Company and each of its Selected Affiliates on or after attaining age
          65 or, if earlier, the age at which the Participant may retire with an
          unreduced normal retirement benefit under the tax-qualified pension
          benefit plan sponsored by the Company or a Selected Affiliate and
          applicable to the Participant, or early retirement under such plan
          with the consent of the Committee.

               "SETTLEMENT DATE" means the later of the date on which a
          Participant terminates employment with the Company and each of its
          Selected Affiliates and the date selected by a Participant in a
          Participation Agreement for distribution of all or a portion of the
          amounts deferred during a Plan Year as provided in Section A 7.2. A
          leave of absence granted by the Company will not be considered a
          termination of employment during the term of such leave.

               "WINDOW PERIOD" means the period from the third business day to
          the twelfth business day following the public release by the Company
          of its earnings, or such shorter period, as determined by the General
          Counsel of the Company.

                                      A-1
<PAGE>   26

                                   ARTICLE III
                                  PARTICIPATION

     A 3.1 PARTICIPATION. Any Eligible Employee may participate in the MSAP.

     A 3.2 DURATION OF PARTICIPATION. Participation in the MSAP shall continue
as long as the Participant is eligible to receive benefits under the MSAP.

                                   ARTICLE IV
                         DEFERRALS AND VOLUNTARY AMOUNTS

     A 4.1 AMOUNT OF DEFERRAL. With respect to each Plan Year, a Participant may
elect to defer a specified dollar amount or percentage of his Bonus. An election
may be made prior to the beginning of any Plan Year by filing a Participation
Agreement with the Committee in accordance with Section 3.2.

     A 4.2 AUTOMATIC DEFERRALS. A Participant's Bonus in excess of amounts
deductible by the Company with respect to a Plan Year under Section 162(m) of
the Code may be deferred under the MSAP under rules adopted by the Committee.

                                    ARTICLE V
                        MATCHING CONTRIBUTIONS AND GRANTS

     A 5.1 MATCHING CONTRIBUTIONS AND GRANTS.

          The Company shall at the discretion of the Committee either

          (a) credit to the Participant's Matching Shares Account 25% of the
amounts allocated to his Deferred Shares Account directly as the result of Bonus
deferrals made pursuant to Section A 4.1, but no such credit shall be made as
the result of allocation of dividends pursuant to Section A 6.4. (Matching
Shares credited pursuant to this Subsection shall become nonforfeitable in
accordance with Section A 6.6); or

          (b) grant pursuant to Section 5 of the 1992 Incentive Equity Plan
Restricted Shares equal in number to 25% of the amounts allocated to his
Deferred Shares Account directly as the result of Bonus deferrals made pursuant
to Section A 4.1, but no such grant shall be made as the result of allocation of
dividends pursuant to Section A 6.4. (Restricted Shares granted pursuant to this
Subsection shall become nonforfeitable five years after the Date of Grant,
subject to such conditions of continuous employment and continuous share
ownership as are set forth in a Restricted Share Agreement by and between the
Company and the Participant).

                                      A-2
<PAGE>   27

                                   ARTICLE VI
                              PARTICIPANT ACCOUNTS

     A 6.1 ESTABLISHMENT OF ACCOUNTS. The Company, through its accounting
records, shall establish a Deferred Shares Account and a Cash Account, and, as
necessary, a Matching Shares Account for each Participant who elects to defer a
Bonus as provided in Section A 4.1.

     A 6.2 CREDITING OF DEFERRAL COMMITMENTS AND MATCHING CONTRIBUTIONS. The
portion of a Participant's Bonus that is deferred pursuant to a Deferral
Commitment and any related matching contribution under Section A 5.1(a) shall be
credited to the Participant's Deferred Shares Account and Matching Shares
Account, respectively, as of the date the corresponding non-deferred portion of
the Bonus would have been paid to the Participant; provided, however, that the
portion of a Participant's Bonus that is deferred pursuant to Section A 4.2
shall be credited to the Participant's Account as of the date the Bonus would
have been paid to the Participant absent the application of Section A 4.2. As of
such payment date, (i) the credits to each Participant's Deferred Shares Account
for each such payment date, shall be deemed invested in a number of whole
Deferred Shares determined by dividing such credits by the Fair Market Value for
such date, and (ii) the credits for such date to each Participant's Matching
Shares Account shall be deemed invested in a number of whole Matching Shares
determined by dividing such credits by the Fair Market Value for such date.
Matching Shares shall be grants of Deferred Shares pursuant to Section 6 of the
1992 Incentive Equity Plan. Fractional Shares shall be credited to the Cash
Account.

     A 6.3 DETERMINATION OF ACCOUNTS.

          (a) The balance credited to each Participant's Account as of a
particular date shall equal the amount credited pursuant to Section A 6.2, and
shall be adjusted in the manner provided in Section A 6.4.

          (b) The Company through its accounting records, shall maintain a
separate and distinct record of the amount in each Account as adjusted to
reflect income and distributions.

     A 6.4 ADJUSTMENTS TO ACCOUNTS.

          (a) (i) Each Account shall be credited, as of the payment date of any
cash dividend paid on Shares, with additional Deferred Shares and Matching
Shares equal in value to the amount of cash dividends paid by the Company on
that number of Shares equivalent to the respective number of Deferred Shares and
Matching Shares in such Account on such payment date. The dividend equivalents
shall be calculated by dividing the dollar value of such dividend equivalents by
the Fair Market Value at the dividend payment date. Fractional Shares shall be
credited to the Cash Account.

          (ii) A Participant may elect to convert the Deferred Shares
representing a portion of such dividend equivalents to cash to be credited to
his or her Cash Account by filing a written notice thereof with the Committee,
which shall be effective only with respect to cash dividends paid after the Plan
Year in which such notice is filed with the Committee. As of each Determination
Date, Cash Accounts shall be increased by the amount of interest earned since
the immediately preceding Determination Date. Interest shall be credited at the
Declared Rate as of

                                      A-3
<PAGE>   28

such Determination Date based on the balance of the cash amounts credited to the
Cash Account since the immediately preceding Determination Date, but after such
Cash Account has been adjusted for any contributions or distributions to be
credited or deducted for such period. Interest for the period prior to the first
Determination Date applicable to a Participant's Cash Account shall be deemed
earned ratably over such period. Until a Participant or his Beneficiary receives
his entire Account, the unpaid balance thereof credited in Deferred Shares and
Matching Shares shall be credited with dividend equivalents as provided in this
Subsection, except as provided in Section A7.2.

          (b) Each Participant's Account shall be immediately debited with the
amount of any distributions under Article VIII to or on behalf of the
Participant or, in the event of his death, his Beneficiary.

     A 6.5 STATEMENT OF ACCOUNTS. As soon as practicable after the end of each
calendar quarter, a statement shall be furnished to each Participant or, in the
event of his death, to his Beneficiary showing the status of his Account as of
the end of the calendar quarter, any changes in his Account since the end of the
immediately preceding calendar quarter, and such other information as the
Committee shall determine.

     A 6.6 VESTING OF ACCOUNTS.

          (a) Except as provided in Section A 6.7, each Participant shall at all
times have a nonforfeitable interest in his Deferred Shares Account balance and
his Cash Account balance.

          (b) Matching Shares attributable to credits pursuant to Section A
5.1(a) in a Participant's Matching Shares Account with respect to a Plan Year,
and additional Matching Shares attributable to dividend credits with respect to
such Matching Shares pursuant to Section A 6.4(a)(i), shall become
nonforfeitable as of the fifth anniversary of the crediting of the Matching
Shares pursuant to Section A 5.1(a)(the "vesting period"), provided that:

               (i) the Participant has remained in the continuous employ of the
          Company or a Selected Affiliate during the applicable vesting period;
          and

               (ii) the Participant, during the applicable vesting period, does
          not receive a distribution of deemed Shares credited to his Deferred
          Shares Account as the result of the deferral by the Participant of the
          Bonus which relates to the crediting of the Matching Shares pursuant
          to Section A 5.1(a).

A Participant will not be deemed to have failed to satisfy the ownership
requirement described in Paragraph (ii) of this Subsection if at all times
during the applicable vesting period the number of Shares owned by the
Participant together with the number of Deferred Shares and Matching Shares
(whether or not vested) credited to the Participant's Account equal or exceed
the Participant's share ownership requirement in the Company, if any.

          (c) Notwithstanding the provisions of Subsection (b) of this Section,
the nonvested portion of a Participant's Account will become immediately
nonforfeitable in the event of the Participant's death, Disability, or upon the
occurrence of a Change in Control of the

                                      A-4
<PAGE>   29

Company that shall occur while the Participant is an employee of the Company or
a Selected Affiliate.

          (d) Notwithstanding the provisions of Subsection (b) of this Section,
the nonvested portion of a Participant's Account will become nonforfeitable in
the event of the Participant's Retirement, provided that the Participant does
not elect a distribution from the MSAP of the Shares attributable to the
Deferred Shares relating to the nonvested Matching Shares until the fifth
anniversary of the applicable Date of Grant.

          (e) Any portion of an Account as to which the requirements of
Subsection (b) of this Section have not been satisfied shall be forfeited,
unless the Committee determines otherwise.

          (f) For purposes of this Section, (i) the continuous employment of a
Participant with the Company or a Selected Affiliate shall not be deemed to have
been interrupted, and the Participant will not be deemed to have ceased to be an
employee of the Company or a Selected Affiliate, by reason of the transfer of
his employment among the Company and its Selected Affiliates or of an approved
leave or absence.

         A 6.7 SPECIAL RULE FOR VALUATION OF DEFERRED SHARE ACCOUNT. Anything in
the MSAP or the Plan to the contrary notwithstanding, in the event any Matching
Shares are forfeited pursuant to Section A 6.6, or any Restricted Shares are
forfeited under a grant made pursuant to Section A 5.1(b), then the value of the
Deferred Shares in the Deferred Shares Account to which such Matching Shares or
Restricted Shares, as the case may be, are attributable shall be deemed to be
the lesser of (a) the then Fair Market Value of such Deferred Shares, or (b) the
value of the Bonus used to acquire such Deferred Shares plus interest at the
Declared Rate as if the Bonus was credited with interest pursuant to Section
5.3. Such deemed value shall be distributed in cash.

                                   ARTICLE VII
                                  DISTRIBUTIONS

          A 7.1 DISTRIBUTION OF ACCOUNT.

          (a) A Participant or, in the event of his death, his Beneficiary shall
be entitled to distribution of all or a part of the balance of his Account,
payable in Shares as provided in this Article, following his Settlement Date or
Dates; provided, however, that his Cash Account shall be payable in cash; and
provided, further, that any fractional share shall be paid in cash with the
final distribution of a Participant's Account.

          (b) The number of Shares distributable shall be equal to the number of
Deferred Shares and Matching Shares in the Participant's Account determined as
of the Quarter Date coincident with or next following his Settlement Date or
Dates.

          A 7.2 IN-SERVICE DISTRIBUTION.

                                      A-5
<PAGE>   30

          (a) A Participant may irrevocably elect to receive an in-service
distribution of the Deferred Shares attributable to his deferred Bonus, and
related nonforfeitable Matching Shares, for any Plan Year on or commencing not
earlier than the beginning of the sixth Plan Year following the Plan Year in
which such Bonus otherwise would have been first payable. A Participant's
election of an in-service distribution shall be made in the Participation
Agreement filed for the Plan Year as provided in Article III. The Participant
shall elect irrevocably to receive such Deferred Shares and related Matching
Shares as an in-service distribution of Stock under one of the forms provided in
Section A 7.3.

          (b) A Participant may irrevocably elect to receive an in-service
distribution of cash equal to the amount of the dividend equivalent to be
credited to his or her Deferred Shares Account pursuant to Section A 6.4(a)(i)
as of the payment date of a cash dividend on Shares. A Participant's election
for a cash distribution shall be filed in writing with the Committee not later
than during the second Plan Year preceding the date the dividend equivalent
otherwise would be so credited to his or her Account.

         A. 7.3  FORM OF DISTRIBUTION.

          (a) As soon as practicable after the end of the Quarter Date in which
a Participant's Settlement Date occurs, but in no event later than 30 days
following the end of such Quarter Date, the Company shall distribute or cause to
be distributed to the Participant a number of Shares and/or an amount of cash as
determined under Section A 7.1, under one of the forms provided in this Section.

          (b) Distribution of a Participant's Account with respect to any Plan
Year shall be made in cash and in whole Shares plus cash equal in value to any
fractional Share in one of the forms set forth in Section 6.5(a), without
interest, but with dividends reinvested as provided in Section 5.5; subject,
however, to Section 6.4(d).

          (c) In the event of a Participant's death, the cash and the number of
Shares of Stock in his Account shall be distributed to his Beneficiary in a
single distribution as soon as practicable after the end of the Quarter Date in
which the Participant's death occurs.

          (d) The Participant's election of the form of distribution shall be
made at the time his initial election to defer is made pursuant to Section A
4.1, or if later by written notice filed with the Committee at least one year
prior to the Participant's voluntary termination of employment with, or
Retirement from, the Company. Any such election may be changed by the
Participant at any time and from time to time without the consent of any other
person by filing a later signed written election with the Committee; provided
that any election made less than one year prior to the Participant's voluntary
termination of employment or Retirement shall not be valid, and in such case
payment shall be made in accordance with the Participant's prior election.

          (e) The amount of cash and the number of Shares to be distributed in
each installment shall be equal to the quotient obtained by dividing the amount
of cash and the number of Deferred Shares and nonforfeitable Matching Shares in
the Participant's Account as of the date of such installment payment by the
number of installment payments remaining to be made to such Participant at the
time of calculation. Fractional Shares shall be rounded down to the nearest

                                      A-6
<PAGE>   31

whole share, and such fractional amount shall be re-credited as a fractional
Deferred Share or Matching Share in the Participant's Account.

          (f) If a Participant fails to make an election in a timely manner as
provided in this Section, distribution shall be made in a single distribution as
soon as practicable after the end of the Quarter Date in which a Participant's
Settlement Date occurs.

     A 7.4 SPECIAL DISTRIBUTIONS. Notwithstanding any other provision of the
MSAP except Section A 6.7, a Participant may elect at any time to receive a
distribution of part or all of the nonforfeitable portion of his Account in one
or more distributions if (and only if) the amount of cash and the number of
Deferred Shares and nonforfeitable Matching Shares in the Participant's Account
subject to such distribution is reduced by 6%. Any distribution made pursuant to
such an election shall be made as soon as practicable following the date such
election is submitted to the Committee. The remaining 6% of the portion of the
electing Participant's Account subject to such distribution shall be forfeited.
Forfeitable Matching Shares attributable to the portion of the electing
Participant's Deferred Shares subject to such distribution shall also be
forfeited, and Section A 6.7 shall apply to the such portion.

     A 7.5 FACILITY OF PAYMENT. Whenever and as often as any Participant or his
Beneficiary entitled to payments under the MSAP shall be under a legal
disability or, in the sole judgment of the Committee, shall otherwise be unable
to apply such payments to his own best interests and advantage, the Committee in
the exercise of its discretion may direct all or any portion of such payments to
be made in any one or more of the following ways: (a) directly to him; (b) to
his legal guardian or conservator; or (c) to his spouse or to any other person,
to be expended for his benefit; and the decision of the Committee, shall in each
case be final and binding upon all persons in interest.

     A 7.6 EMERGENCY BENEFIT. In the event that the Committee, upon written
petition of a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseen financial emergency, the Company shall
pay to the Participant, as soon as practicable following such determination, the
Emergency Benefit in accordance with the standards set forth in Section A 6.3.
Distributions pursuant to this Section may not be made in excess of the value of
the Participant's nonforfeitable Account at the time of such distribution.

     A 7.7 PAYMENT OF SMALL ACCOUNTS. Notwithstanding any other provision of the
MSAP, if a Participant's Account is credited with 1,000 Shares or less on his
Settlement Date, his Account shall be distributed to him in a single
distribution as soon as practicable following his Settlement Date.

                                      A-7

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