Sample Business Contracts


Employment Agreement - Cleveland-Cliffs Inc. and Thomas J. O'Neil

Employment Forms

  • Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

                  This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated as of June 30, 1997, by and between Cleveland-Cliffs Inc, an Ohio
corporation ("Cleveland-Cliffs"), and Thomas J. O'Neil, Social Security Number
___ , who is presently Executive Vice President - Operations of Cleveland- 
Cliffs (the "Executive"), amends and restates the Employment Agreement, dated 
as of September 10, 1996, between Cleveland-Cliffs and the Executive;

                                   WITNESSETH:

                  WHEREAS, the Executive is a senior executive of
Cleveland-Cliffs and has made and is expected to continue to make major
contributions to the profitability, growth and financial strength of
Cleveland-Cliffs;

                  WHEREAS, Cleveland-Cliffs recognizes that, as is the case for
most publicly held companies, the possibility of a Change of Control (as that
term is hereafter defined) exists;

                  WHEREAS, Cleveland-Cliffs desires to assure itself of both
present and future continuity of management in the event of a Change of Control
and desires to establish certain minimum compensation rights of its senior
executives, including the Executive, applicable in the event of a Change of
Control;

                  WHEREAS, Cleveland-Cliffs wishes to ensure that its senior
executives are not practically disabled from discharging their duties upon a
Change of Control; and

                  WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits which the Executive could reasonably expect to
receive from Cleveland-Cliffs absent a Change of Control and, accordingly,
although effective and binding as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change of Control;

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration including the Release provided for in Section 12
hereof, the receipt of which is hereby acknowledged, Cleveland-Cliffs and the
Executive agree as follows:

                   1. OPERATION OF AGREEMENT; CERTAIN DEFINITIONS:

                  (a) This Agreement is a continuation of the employment
agreement originally effective as of September 10, 1996 (the "Effective Date"),
but, anything in this Agreement to the contrary notwithstanding, this Agreement
shall not become operative unless and until there shall have occurred a Change
of Control. For 



<PAGE>   2
                                                                               2

purposes of this Agreement, a "Change of Control" shall have occurred if at any
time during the Term (as that term is hereafter defined) any of the following
events shall occur:

                  (i) Cleveland-Cliffs shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of Cleveland-Cliffs as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) A person, within the meaning of Section 3(a)(9) or of
         Section 13(d) (3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of Cleveland-Cliffs (whether directly or indirectly);
         or

                  (iv) During any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of Cleveland-Cliffs cease, for any reason, to constitute at
         least a majority thereof, unless the election, or the nomination for
         election by the shareholders of Cleveland-Cliffs, of each Director
         first elected during any such period was approved by a vote of at least
         one-third of the Directors of Cleveland-Cliffs who are Directors of
         Cleveland-Cliffs on the date of the beginning of any such period.

                  (b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.

                  (c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the Effective Date hereof and shall expire as
of the later of (i) the close of business on February 1, 2000 and (ii) the
expiration of the Period of Employment (as that term is hereafter defined);
provided, however, that (A) this Agreement may be continued in full force and
effect for an additional period or periods of one (1) year if Cleveland-Cliffs
and the Executive mutually agree to such extension or extensions, (B) this
Agreement shall automatically renew for an additional period or periods of one
(1) year if the end of the 



<PAGE>   3
                                                                               3

Term occurs during the period of any discussions with any party that might
ultimately result in the occurrence of a Change of Control, and (C) subject to
Section 14 hereof, if, prior to a Change of Control, the Executive ceases for
any reason to be an officer of Cleveland-Cliffs, thereupon the Term shall be
deemed to have expired and this Agreement shall immediately terminate and be of
no further effect.

                  (d) The term "Industry Service" shall mean professionally
related service, prior to his employment by Cleveland-Cliffs or its subsidiaries
and affiliates, by the Executive as an employee within the iron and steel
industry or an industry to which such Executive's position with Cleveland-Cliffs
relates. The Executive shall be given credit for one year of Industry Service
for every two years of service with Cleveland-Cliffs, as designated in writing
by, or in minutes of the actions of, the Compensation and Organization Committee
of the Board of Directors of Cleveland-Cliffs, and such years of credited
Industry Service shall be defined as "Credited Years of Industry Service."

                  2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms
and conditions of this Agreement, upon the occurrence of a Change of Control,
Cleveland-Cliffs shall continue the Executive in its employ and the Executive
shall remain in the employ of Cleveland-Cliffs for the period set forth in
Section 2(b) hereof (the "Period of Employment"), in the position and with
substantially the same duties and responsibilities that he had immediately prior
to the Change of Control, or to which Cleveland-Cliffs and the Executive may
hereafter mutually agree in writing. Throughout the Period of Employment, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of Cleveland-Cliffs as in effect for senior executives immediately
prior to the Change of Control) to the business and affairs of Cleveland-Cliffs,
but nothing in this Agreement shall preclude the Executive from devoting
reasonable periods of time during normal business hours to (i) serving as a
director, trustee or member of or participant in any organization or business so
long as such activity would not constitute Competitive Activity (as described in
Section 11 hereof), (ii) engaging in charitable and community activities, or
(iii) managing his personal investments. The business, assets, and properties of
Cleveland-Cliffs, as well as the support services and facilities available to
the Executive, shall not differ materially from those of Cleveland-Cliffs
immediately prior to the date of the Change of Control.

                  (b) The Period of Employment shall commence on the date of the
occurrence of a Change of Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the expiration of the third
anniversary of the occurrence of the Change of Control, or (ii) the Executive's
death.


<PAGE>   4
                                                                               4

                   3. COMPENSATION DURING PERIOD OF EMPLOYMENT: During the
Period of Employment the Executive shall receive and be entitled to the
following:

                   (a) an annual base salary at a rate not less than the
Executive's annual fixed or base compensation (payable monthly or otherwise as
in effect for senior executives of Cleveland-Cliffs immediately prior to the
occurrence of a Change of Control) or such higher rate as may be determined from
time to time by the Board of Directors of Cleveland-Cliffs (the "Board") or the
Organization and Compensation Committee thereof (the Committee") (which base
salary at such rate is herein referred to as "Base Pay"), reduced by any
disability benefits which the Executive receives under any Cleveland-Cliffs
disability program;

                   (b) participation, consistent with past practices, in
incentive compensation plans and arrangements of Cleveland-Cliffs in effect as
of the date of the Change of Control, as the same may subsequently be modified,
supplemented or replaced, including, without limitation, the Incentive Bonus
Plan and the 1992 Incentive Equity Plan (including the Long-Term Performance
Share Program), without material reduction in the reward opportunities available
to the Executive, and without reduction in the target bonus and target award
percentages applicable to the Executive immediately prior to the occurrence of a
Change of Control (with annual amounts and opportunities awarded pursuant to
such plans, programs and arrangements collectively referred to as "Incentive
Pay");

                   (c) participation in the Cleveland-Cliffs Inc Supplemental
Retirement Benefit Plan (As Amended and Restated as of January 1, 1997)
("Supplemental Retirement Plan" or "SRP"), as the same hereafter may be amended
prior to a Change of Control, and modified as provided in Section 6 hereof; and

                   (d) participation, consistent with past practices, in all
other employee benefit plans and practices of Cleveland-Cliffs in effect as of
the date of the Change of Control (including, without limitation, medical,
dental, hospitalization, health and welfare plans, life, long-term disability
and accident insurance programs, employee savings and investment plans, stock
ownership plans and retirement plans and supplemental arrangements), as the same
may be modified, supplemented or replaced without material reduction in total
value of the benefits to Executive (collectively, "Employee Benefits").

                   4. TERMINATION FOLLOWING A CHANGE OF CONTROL: (a) In the
event of the occurrence of a Change of Control, the Executive's employment may
be terminated by Cleveland-Cliffs during the Period of Employment and the
Executive shall be entitled to the benefits provided by Section 5 unless such
termination is the result of the occurrence of one or more of the following
events:

                         (i)        The Executive's death; or


<PAGE>   5
                                                                               5

                        (ii) The Executive's employment is terminated for
                  Cause.

For purposes of this Agreement, "Cause" shall mean that, prior to any
termination pursuant to Section 4(b), the Executive shall have committed any act
that is materially inimical to the best interests of Cleveland-Cliffs and that
constitutes common law fraud, a felony, or other gross malfeasance of duty. 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 his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive committed an act set
forth in this Section 4(a) and specifying the particulars thereof in detail.
Nothing herein shall limit the right of the Executive or his beneficiaries to
contest the validity or propriety of any such determination.

                  (b) During the Period of Employment the Executive shall be
entitled to the benefits as provided in Section 5 hereof upon the occurrence of
one or more of the following events:

                  (i) The Executive's "Disability", shall be deemed to have
         occurred six (6) months after the Executive shall have become totally
         and permanently disabled by bodily or mental injury or disease so as to
         be prevented thereby from engaging in any executive employment or
         occupation for remuneration or profit, as determined and certified to
         Cleveland-Cliffs and the Executive by The Cleveland Clinic (or if it is
         unwilling or unable to act, by one or more physicians designated for
         such purpose by the Cleveland Academy of Medicine or its successor
         organization); or

                  (ii)  Termination by the Executive of his employment
         with Cleveland-Cliffs upon the occurrence of any of the
         following events:

                           (A) The failure to elect, reelect or otherwise to
                  maintain the Executive in the office or position, or a
                  substantially equivalent office or position, of or with
                  Cleveland-Cliffs which the Executive held immediately prior to
                  a Change of Control, or the removal of, or failure to reelect,
                  the Executive as a Director of Cleveland-Cliffs (or any
                  successor thereto), if the Executive shall have been a
                  Director of Cleveland-Cliffs immediately prior to the Change
                  of Control;

                           (B) (I) A significant adverse change in the nature or
                  scope of the authorities, powers, functions, responsibilities
                  or duties attached to the position with Cleveland-Cliffs which
                  the Executive held immediately  prior to the Change of 
                  Control, (II) a reduction in the 



<PAGE>   6
                                                                               6

                  aggregate of the Executive's Base Pay and Incentive Pay
                  received from Cleveland-Cliffs, or a reduction in the
                  Executive's opportunities for Incentive Pay (including, but
                  not limited to, a reduction in target bonus percentage or
                  target award opportunity (whether measured by number of
                  performance shares or management objectives)) provided by
                  Cleveland-Cliffs, or (III) a reduction or termination of any
                  benefits described in Section 3(c) or (d) hereof to which the
                  Executive was entitled immediately prior to the Change of
                  Control, any of which is not remedied by Cleveland-Cliffs
                  within 10 calendar days after receipt by Cleveland-Cliffs of
                  written notice from the Executive of such change, reduction or
                  termination, as the case may be;

                           (C) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by Cleveland-Cliffs by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change of Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change of Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  the Executive's performance of, or has caused the Executive to
                  suffer a substantial reduction in, any of the authorities,
                  powers, functions, responsibilities or duties attached to the
                  position held by the Executive immediately prior to the Change
                  of Control, which situation is not remedied by
                  Cleveland-Cliffs within ten calendar days after written notice
                  to Cleveland-Cliffs from the Executive of such determination;

                           (D) The liquidation, dissolution, merger,
                  consolidation or reorganization of Cleveland-Cliffs or the
                  transfer of all or a significant portion of its business
                  and/or assets, unless the successor or successors (by
                  liquidation, merger, consolidation, reorganization or
                  otherwise) to which all or a significant portion of its
                  business and/or assets have been transferred (directly or by
                  operation of law) shall have assumed all duties and
                  obligations of Cleveland-Cliffs under this Agreement pursuant
                  to Section 16 hereof;

                           (E) The relocation of Cleveland-Cliffs' principal
                  executive offices, or a requirement that the Executive change
                  his principal location of work to any location which is in
                  excess of 25 miles from the location thereof immediately prior
                  to the Change of Control, or a requirement that the Executive
                  travel away from his office in the course of discharging his


<PAGE>   7
                                                                               7

                  responsibilities or duties hereunder at least 20% more (in
                  terms of aggregate days in any calendar year or in any
                  calendar quarter when annualized for purposes of comparison to
                  any prior year) than was required of him prior to the Change
                  of Control without, in any case described above, the prior
                  written consent of the Executive; or

                           (F) Without limiting the generality or effect of the
                  foregoing, any material breach of this Agreement by
                  Cleveland-Cliffs or any successor thereto.

                  (c) A termination by Cleveland-Cliffs pursuant to Section 4(a)
hereof other than for Cause or by the Executive pursuant to Section 4(b) hereof
shall not affect any rights which the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of Cleveland-Cliffs, which
rights shall be governed by the terms thereof, subject, however, to the
modifications in Section 6 hereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the Executive is not
entitled to any payments under Sections 3 or 5 hereof, the Executive shall have
no further obligation or liability to Cleveland-Cliffs hereunder with respect to
his prior or any future employment by Cleveland-Cliffs.

                  5. SEVERANCE COMPENSATION: If Cleveland-Cliffs shall terminate
the Executive's employment during the Period of Employment, other than pursuant
to Cause under Section 4(a) hereof, or if the Executive shall terminate his
employment pursuant to Section 4(b) hereof, then in lieu of any further payments
to the Executive for periods subsequent to the date of the Executive's
termination of employment (the "Termination Date"), the date of which shall be
the date of termination or such other date that may be specified by the
Executive if the termination is pursuant to Section 4(b) hereof,
Cleveland-Cliffs shall provide Severance Compensation to the Executive as
described below:

                   (a) SEVERANCE PAY. Within five business days after the
Termination Date:

                  (i) Cleveland-Cliffs shall pay to the Executive a lump sum
         payment (the "Severance Payment") in an amount equal to the present
         value (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
         such rate is so prescribed, a rate equal to the then "applicable
         interest rate" under Section 417(e)(3)(A)(ii)(II) of the Code for the
         month in which the Termination Date occurs (the "Discount Rate")) of

                           (A) the amount of Base Pay that would have been paid
                  to the Executive pursuant to Section 3(a) for the
                  greater of (I) one year or (II) the duration of the 


<PAGE>   8

                  Period of Employment, in each case if the termination had not
                  taken place (at the rate in effect immediately prior to the
                  Change of Control or prior to the Termination Date, whichever
                  is higher) and, if the Termination is on account of the
                  Executive's Disability, reduced by the amount of disability
                  benefits that would have been paid to the Executive for the
                  duration of the Period of Employment if the termination had
                  not taken place; plus

                           (B) the amount of Average Incentive Pay (as that term
                  is hereinafter defined) that would have been paid to the
                  Executive pursuant to Section 3(b) for the greater of (I) one
                  year or (II) the duration of the Period of Employment if the
                  termination had not taken place.

                  For purposes of this Agreement, Average Incentive Pay for any
                  12 month period shall mean an amount which is the greater of
                  (III) the average amount of Incentive Pay (as defined in
                  Section 3(b) hereof) awarded to the Executive for the three
                  calendar years immediately prior to the Termination Date, or
                  (IV) the amount of the most recent award of Incentive Pay.

                  (ii) Cleveland-Cliffs shall pay to the Executive 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 at or after the
         end of the Period of Employment under the SRP, as the same may be
         further amended prior to a Change of Control and as modified by Section
         6 hereof (assuming Base Salary at the rate in effect immediately prior
         to the occurrence of Change of Control and Incentive Pay equivalent to
         the amount of Average Incentive Pay), if the Executive had remained in
         the full-time employment of Cleveland-Cliffs until the end of the
         Period of Employment.

         The calculation of the SRP Payment and its actuarial equivalence shall
         be made as of the date the Executive is terminated. The lump sum of
         actuarial equivalence shall be calculated as of the end of the Period
         of Employment using the assumptions and factors used in the SRP, and
         such sums shall be discounted to the date of payment using the Discount
         Rate.

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

                   (b) EMPLOYEE BENEFITS. For the greater of (i) one year or
(ii) the duration of the Period of Employment, Cleveland-Cliffs shall arrange to
provide the Executive with Employee Benefits substantially similar to those
which the Executive was receiving



<PAGE>   9
                                                                              9

or entitled to receive immediately prior to the Termination Date as described in
Section 3(d) (and if and to the extent that such benefits shall not or cannot be
paid or provided under any policy, plan, program or arrangement of
Cleveland-Cliffs solely due to the fact that the Executive is no longer an
officer or employee of Cleveland-Cliffs, then Cleveland-Cliffs shall itself pay
or provide for the payment to the Executive, his dependents and beneficiaries,
such Employee Benefits). Without otherwise limiting the purposes or effect of
this Section 5(b), Employee Benefits payable to the Executive pursuant to this
Section 5(b) by reason of any "welfare benefit plan" of Cleveland-Cliffs (as the
term "welfare benefit plan" is defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) shall be reduced
to the extent comparable welfare benefits are actually received by the Executive
from another employer during the period beginning upon the occurrence of the
Termination Date and ending upon the last day during which Cleveland-Cliffs is
required to provide such Employee Benefits pursuant to the first sentence of
this Section 5(b).

                  (c) STOCK OPTIONS, RESTRICTED STOCK AND PERFORMANCE SHARES.
Upon the Termination Date, (i) all Stock Options granted to the Executive
pursuant to the 1992 Incentive Equity Plan, or any successor plan or similar
plan, shall be vested, (ii) the restrictions on any restricted stock awarded to
the Executive under the 1992 Incentive Equity Plan, or any successor plan or
similar plan, shall be released, and (iii) all Performance Share Awards under
the Long-Term Performance Share Program under the 1992 Incentive Equity Plan for
which the measurement period has not yet expired shall be earned assuming
management objectives have been met at the target level.

                  (d) METHOD OF PAYMENT. Upon written notice given by the
Executive to Cleveland-Cliffs prior to the occurrence of a Change of Control,
the Executive, at his sole option, without adjustment to reflect the present
value of such amounts as aforesaid, may elect to have all or any of the
Severance Payment described in Section 5(a) hereof paid to him on a quarterly or
monthly basis during the time remaining until the expiration of the third
anniversary of the Change of Control.

                  (e) OUTPLACEMENT COUNSELING. Cleveland-Cliffs shall reimburse
the Executive for reasonable expenses incurred for outplacement counseling (i)
which are pre-approved by the Chief Human Resources Officer of Cleveland-Cliffs,
(ii) which do not exceed 15% of the Executive's annual Base Pay, and (iii) which
are incurred by the Executive within six months following the Termination Date.

                  (f) SET-OFF AND COUNTERCLAIM. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation against any
payment to or benefit for the Executive provided for in this Agreement.


<PAGE>   10
                                                                              10


                  (g) INTEREST. Without limiting the rights of the Executive at
law or in equity, if Cleveland-Cliffs fails to make any payment required to be
made hereunder on a timely basis, Cleveland-Cliffs shall pay interest on the
amount thereof at an annualized rate of interest equal to the then-applicable
Discount Rate.

                  (h) CALCULATION. The calculation of all payments of
compensation and other benefits to be provided to Executive under this Agreement
(other than payments pursuant to Section 8 hereof) shall be made by Hewitt
Associates ("Hewitt"), or such other actuarial firm selected by
Cleveland-Cliffs' independent accountants and satisfactory to Executive.
Cleveland-Cliffs shall provide to such actuarial firm all information requested
by such actuarial firm as necessary for or helpful to it to make the
calculations hereunder.

                  6. SUPPLEMENTAL RETIREMENT PLAN. Cleveland-Cliffs hereby
waives the discretionary right, at any time subsequent to the date of a Change
of Control, to amend or terminate the SRP as to Executive as provided in
paragraph 8 thereof or to terminate the rights of Executive or his beneficiary
under the SRP in the event Executive engages in a competitive business as
provided in any plan or arrangement between Cleveland-Cliffs 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 Section 6 shall constitute a "Supplemental Agreement" as defined in
Paragraph 1.J of the SRP. If Cleveland-Cliffs shall terminate the Executive's
employment during the Period of Employment, other than for Cause pursuant to
Section 4(a) hereof, or if the Executive shall terminate his employment pursuant
to Section 4(b) hereof, or if, following the end of the Period of Employment,
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) The Executive shall be credited with years of continuous
service at the time of his termination of employment with Cleveland-Cliffs (by
death or otherwise) 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 Cleveland-Cliffs until the
expiration of the third anniversary of the Change of Control, and had he
attained the greater of (iii) his actual chronological age or (iv) his
chronological age at the expiration of the third anniversary of the Change of
Control. 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. The Executive shall be eligible to commence the 30-year
pension benefit on the earlier of (v) the date upon which the Executive would
have otherwise reached 30 years of continuous service with Cleveland-Cliffs but
for his termination of employment after the Change of Control, or (vi) the 
date upon 


<PAGE>   11
                                                                              11


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 (as defined in Section 1(d) hereof) is equal to 30 years; and

                   (b) The Executive shall be a "Participant" in the SRP,
notwithstanding any limitations therein.

A copy of the SRP is attached to this Agreement as Exhibit A. The SRP is
incorporated in all respects herein; provided, however, that the terms of this
Agreement shall take precedence to the extent they are contrary to provisions
contained in the SRP.

                   7. WELFARE BENEFIT CONTINUATION FOLLOWING TERMINATION AFTER
PERIOD OF EMPLOYMENT. Following the later of the end of the Period of
Employment, or Executive's termination of employment with Cleveland-Cliffs,
Cleveland-Cliffs shall:

                  (a) Provide medical, hospital, surgical and prescription drug
coverage, equivalent to that furnished on February 1, 1992 to officers who
retire after January 1, 1990 by Cleveland-Cliffs, to the Executive and his
spouse for their lifetimes, and to eligible dependents of the Executive for
their periods of eligibility, through insurance or otherwise;

                  (b) Provide life insurance on the Executive, equivalent to
that furnished on February 1, 1992 to officers who retire after January 1, 1990
by Cleveland-Cliffs, to the Executive for his lifetime; and

                  (c) Without otherwise limiting the purposes or effect of this
Section 7 hereof, welfare benefits payable to the Executive or his spouse or
dependents pursuant to this Section 7 shall be reduced to the extent comparable
welfare benefits are payable pursuant to Section 5(b) hereof or are actually
received by the Executive or his spouse or dependents from another employer.

                  8. CERTAIN ADDITIONAL PAYMENTS BY CLEVELAND-CLIFFS. (a)
Anything in this Agreement to the contrary notwithstanding, in the event that
this Agreement shall become operative and it shall be determined (as hereafter
provided) that any payment or distribution by Cleveland-Cliffs to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, 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 by reason of being considered
"contingent on a change in ownership or control" of the Corporation, 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 


<PAGE>   12
                                                                              12

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 this Agreement, 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.

                  (b) 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 Cleveland-Cliffs to
the Executive and the amount of such Gross-Up Payment, if any, shall be made by
a nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both
Cleveland-Cliffs 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
Cleveland-Cliffs or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, Cleveland-Cliffs shall pay the required
Gross-Up Payment to the Executive within five 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 Cleveland-Cliffs 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
Cleveland-Cliffs should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that Cleveland-Cliffs
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 Cleveland-Cliffs and the Executive as promptly
as possible. Any such Underpayment shall be promptly paid by Cleveland-Cliffs 
to, or for the benefit of, the 


<PAGE>   13
                                                                              13

Executive within five business days after receipt of such determination and
calculations.

                  (c) Cleveland-Cliffs and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of Cleveland-Cliffs 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 Cleveland-Cliffs and the Executive.

                  (d) 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 Cleveland-Cliffs, provide to
Cleveland-Cliffs 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 Cleveland-Cliffs,
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 five business days pay to Cleveland-Cliffs
the amount of such reduction.

                  (e) 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 Cleveland-Cliffs. If such fees
and expenses are initially paid by the Executive, Cleveland-Cliffs shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof.

                  (f) The Executive shall notify Cleveland-Cliffs in writing of
any claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by Cleveland-Cliffs 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 Cleveland-Cliffs 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 Cleveland-Cliffs and (ii) the date that
any payment of amount with respect to such claim is due. If Cleveland-Cliffs
notifies the Executive in 


<PAGE>   14
                                                                              14

writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

                      (i)  provide Cleveland-Cliffs with any written
                  records or documents in his possession relating to such
                  claim reasonably requested by Cleveland-Cliffs;

                      (ii) take such action in connection with contesting such
                  claim as Cleveland-Cliffs 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 Cleveland-Cliffs;

                     (iii)  cooperate with Cleveland-Cliffs in good faith
                  in order effectively to contest such claim; and

                      (iv)  permit Cleveland-Cliffs to participate in any
                  proceedings relating to such claim;

         PROVIDED, HOWEVER, that Cleveland-Cliffs 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,
         Cleveland-Cliffs 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 Cleveland-Cliffs shall determine;
         PROVIDED, HOWEVER, that if Cleveland-Cliffs directs the Executive to
         pay the tax claimed and sue for a refund, Cleveland-Cliffs 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, Cleveland-Cliffs's control of any such contested 


<PAGE>   15
                                                                              15

         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.

                  (g) If, after the receipt by the Executive of an amount
advanced by Cleveland-Cliffs pursuant to Subsection (f) of this Section, the
Executive receives any refund with respect to such claim, the Executive shall
(subject to Cleveland-Cliffs's complying with the requirements of Subsection (f)
of this Section) promptly pay to Cleveland-Cliffs 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
Cleveland-Cliffs pursuant to Subsection (f) of this Section, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and Cleveland-Cliffs 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
Cleveland-Cliffs to the Executive pursuant to this Section.

                  9. NO MITIGATION OBLIGATION: Cleveland-Cliffs hereby
acknowledges that it will be difficult, and may be impossible, for the Executive
to find reasonably comparable employment following the Termination Date and that
the non-competition covenant contained in Section 11 hereof will further limit
the employment opportunities for the Executive. Accordingly, the parties hereto
expressly agree that except as expressly provided in Sections 5(b) and 7 hereof,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.

                  10. CONFIDENTIALITY: The Executive acknowledges that all trade
secrets, customer lists, and other confidential business information are the
exclusive property of Cleveland-Cliffs, and the Executive shall not at any time
during the Term of this Agreement or at any time thereafter, directly or
indirectly reveal or cause to be revealed to any person or entity the trade
secrets, customer lists and other confidential business information obtained as
a result of the Executive's employment or relationship with Cleveland-Cliffs.

                   11. COMPETITIVE ACTIVITY: For a period of twenty-four (24)
months from and after any termination of employment following the occurrence of
a Change of Control, the Executive shall not become an officer, director, joint
venturer, employee, consultant, 5-percent or more shareholder (directly or
indirectly), or promote or assist (financially or otherwise) any entity which
competes in 



<PAGE>   16
                                                                              16

any business in which Cleveland-Cliffs or any of its affiliates are engaged as
of the date-of the Change of Control. For this purpose, business is defined as
the iron and steel industry. The provisions of this Section 11 shall, following
a Change of Control, supersede and be in lieu of any similar provision in any
other plan or agreement involving Cleveland-Cliffs and the Executive, whether
now existing or hereinafter adopted or entered into, including, but not limited
to, the SRP.

                  12. RELEASE: Payment of the Severance Compensation set forth
in Section 5 hereof is conditioned upon the Executive executing and delivering a
release (the "Release") satisfactory to Cleveland-Cliffs releasing
Cleveland-Cliffs, its directors, employees and affiliates from any and all
claims, demands, damages, actions and/or causes of action whatsoever, which the
Executive may have had on account of the termination of his employment,
including, but not limited to claims of discrimination, including on the basis
of sex, race, age, national origin, religion, or handicapped status (with all
applicable periods during which the Executive may revoke the Release or any
provision thereof having expired), and any and all claims, demands and causes of
action for retirement (other than under any "pension benefit plan" or under any
"welfare benefit plan" of Cleveland-Cliffs (as the terms "pension benefit plan"
and "welfare benefit plan" are defined in Section 3 of ERISA) other than the
SRP), severance or other termination pay, and because pursuant to Section 5(a)
the Executive is entitled to lump sum payments of Incentive Pay and benefits
under the SRP, under the SRP and any incentive compensation plans and
arrangements of Cleveland-Cliffs described in Section 3(b). Such Release shall
not, however, apply to the obligations of Cleveland-Cliffs arising under this
Agreement, or rights of indemnification the Executive may have under the
Regulations of Cleveland-Cliffs or by contract or by statute.

                  13. LEGAL FEES AND EXPENSES: (a) It is the intent of
Cleveland-Cliffs that the Executive not be required to incur any expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Executive hereunder.
Accordingly, if it should appear to the Executive that Cleveland-Cliffs has
failed to comply with any of its obligations under this Agreement or in the
event that Cleveland-Cliffs or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Executive the benefits intended to be provided to the
Executive hereunder, Cleveland-Cliffs irrevocably authorizes the Executive from
time to time to retain counsel of his choice, at the expense of Cleveland-Cliffs
as hereafter provided, to represent the Executive in connection with the
initiation or defense of any such litigation or other legal action, whether by
or against Cleveland-Cliffs or any Director, officer, stockholder or other
person affiliated with Cleveland-Cliffs, in any jurisdiction. Notwithstanding
any existing or prior attorney-



<PAGE>   17

                                                                              17

client relationship between Cleveland-Cliffs and such counsel, Cleveland-Cliffs
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection Cleveland-Cliffs and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. Cleveland-Cliffs shall promptly pay or cause to be
paid and shall be solely responsible for any and all attorneys' and related fees
and expenses incurred by the Executive as a result of Cleveland-Cliffs' failure
to perform this Agreement or any provision hereof or as a result of
Cleveland-Cliffs or any person contesting the validity or enforceability of this
Agreement or any provision hereof as aforesaid.

                  (b) To ensure that the provisions of this Agreement can be
enforced by Executive, certain trust arrangements ("Trusts") have been
established between KeyTrust Company of Ohio, N.A., as Trustee ("Trustee"), and
Cleveland-Cliffs. Trust Agreement No. 1 (Amended and Restated Effective June 1,
1997) ("Trust Agreement No. 1") dated June 12, 1997, and Trust Agreement No. 2
(Amended and Restated Effective June 1, 1997) ("Trust Agreement No. 2") dated
June 12, 1997, as amended and/or restated, between the Trustee and
Cleveland-Cliffs, are attached as Exhibits B and C, respectively. A Trust
Agreement No. 7 ("Trust Agreement No. 7") dated April 9, 1991, as amended,
between the Trustee and Cleveland-Cliffs, is attached as Exhibit D. Each such
Trust Agreement shall be considered a part of this Agreement and shall set forth
the terms and conditions relating to payment under Trust Agreement No. 1 of
compensation and other benefits pursuant to Sections 3, 5 and 8 and pension
benefits pursuant to Sections 3, 5 and 6 owed by Cleveland-Cliffs, payment from
Trust Agreement No. 7 of certain pension benefits pursuant to Sections 3, 5 and
6 owed by Cleveland-Cliffs, and payment from Trust Agreement No. 2 for
attorneys' fees and related fees and expenses pursuant to Section 13(a) hereof
owed by Cleveland-Cliffs. Executive shall make demand on Cleveland-Cliffs for
any payments due Executive pursuant to Section 13(a) hereof prior to making
demand therefor on the Trustee under Trust Agreement No. 2.

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

                  (A) 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 of Control (or on such fifth business day if
         the Board has declared a Change of Control to be imminent) of the
         payments to be made to Executive under the provisions of Sections 3, 5,
         6 and 8 hereof, such present value to be computed using the assumptions
         set forth in Section 5(a) hereof and the computations provided for in
         Section 8 hereof less (II) the balance in the Executive's account
         provided for in Section 7(b) of Trust Agreement No. 1 as of the most 
         recent 


<PAGE>   18
                                                                             18

         completed valuation thereof, less (III) the balance in the
         Executive's account provided for in Section 7(b) of Trust Agreement
         No. 7 as of the most recent completed valuation thereof, as certified
         by the Trustee under each of Trust Agreement No. 1 and Trust Agreement
         No. 7; provided, however, that if the Trustee under Trust Agreement
         No. 1 and/or Trust Agreement No. 7, respectively, does not so certify
         by the end of the fourth (4th) business day after the earlier of such
         Change of Control or declaration, then the balance of such respective
         account 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
         Cleveland-Cliffs' obligation to pay compensation, pension and other
         benefits hereunder, it being the intent of Cleveland-Cliffs that
         assets in such Trusts be held as security for Cleveland-Cliffs'
         obligation to pay compensation, pension and other benefits under this
         Agreement; and

                  (B) 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 Executive's attorneys' and related
         fees and expenses by the Trustee pursuant to Trust Agreement No. 2
         shall, to the extent thereof, discharge Cleveland-Cliffs' obligation
         hereunder, it being the intent of Cleveland-Cliffs that assets in such
         Trust be held as security for Cleveland-Cliffs' obligation under
         Section 13(a) hereof. Executive understands and acknowledges that the
         entire corpus of the Trust under Trust Agreement No. 2 will be $250,000
         and that said amount will be available to discharge not only the
         obligations of the Cleveland-Cliffs to Executive under Section 13(a)
         hereof, but also similar obligations of the Cleveland-Cliffs to other
         executives and employees under similar provisions of other agreements
         and plans.

                  14. EMPLOYMENT RIGHTS: Nothing expressed or implied in this
Agreement shall create any right or duty on the part of Cleveland-Cliffs or the
Executive to have the Executive remain in the employment of Cleveland-Cliffs at
any time prior to a Change of Control; provided, however, that any termination
of employment of the Executive or the removal of the Executive from the office
or position in Cleveland-Cliffs following the commencement of any discussion
with a third person that ultimately results in a Change of Control shall be
deemed to be a termination or removal of the Executive after a Change of Control
for purposes of this Agreement. Executive expressly acknowledges that he is an
employee at will, and that Cleveland-Cliffs may terminate him at any time during
the Period of Employment for any reason if Cleveland-Cliffs pays the Severance
Compensation provided for under Section 5 of this Agreement, and otherwise
comply with its other continuing covenants in this Agreement, including without
limitation, Sections 3 and 6.


<PAGE>   19
                                                                              19

                   15. WITHHOLDING OF TAXES: Cleveland-Cliffs may withhold from
any amounts payable under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or government regulation or ruling.

                   16. SUCCESSORS AND BINDING AGREEMENT: (a) Cleveland-Cliffs
shall require any successor (including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of
Cleveland-Cliffs whether by purchase, merger, consolidation, reorganization or
otherwise, and such successor shall thereafter be deemed "Cleveland-Cliffs" for
the purposes of this Agreement), by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent Cleveland-Cliffs would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of Cleveland-Cliffs and any successor
to Cleveland-Cliffs but shall not otherwise be assignable, transferable or
delegable by Cleveland-Cliffs.

                  (b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.

                  (c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 16. Without limiting the generality of the
foregoing, the 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 will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 16, Cleveland-Cliffs shall have no liability
to pay any amount so attempted to be assigned, transferred or delegated.

                  (d) The agreement of Cleveland-Cliffs to make payments and/or
provide benefits hereunder shall represent an unsecured obligation of
Cleveland-Cliffs.

                  (e) Cleveland-Cliffs and the Executive recognize that each
party will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach,
Cleveland-Cliffs and the Executive hereby agree and consent that the other shall
be entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.

                   17. NOTICE: For all purposes of this Agreement, all
communications including without limitation notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been mailed by
United States registered 



<PAGE>   20
                                                                              20

or certified mail, return receipt requested, postage prepaid, addressed to such
party's address as specified below, or at such other address as such party shall
specify by notice to the other. If to Cleveland-Cliffs, to:

                        Cleveland-Cliffs Inc
                        1100 Superior Avenue
                        Cleveland, Ohio  44114-2589
                        Attention:  Secretary

If to the Executive, to the last address shown on the records of
Cleveland-Cliffs. Notices of change of address shall be effective only upon
receipt.

                   18. GOVERNING LAW: The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws of such State.

                  19. VALIDITY: If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement 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.

                   20. AMENDMENT: This Agreement may be amended only by a
written instrument signed by the parties hereto, which makes specific reference
to this Agreement.

                   21. RIGHTS UNDER OTHER PLANS AND PROGRAMS: Anything in this
Agreement to the contrary notwithstanding, no provision of this Agreement is
intended, nor shall it be construed, to reduce or in any way restrict any
benefit to which Executive may be entitled under any other agreement, plan or
program providing benefits for Executive, including but not limited to the plans
described in Sections 3 and 5 of this Agreement.

                  22. MISCELLANEOUS: No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and Cleveland-Cliffs. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

                   23. COUNTERPARTS: This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an 


<PAGE>   21
                                                                              21

original but all of which together will constitute one and the same agreement.

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

                  IN WITNESS WHEREOF, Cleveland-Cliffs has caused this Agreement
to be executed on its behalf by its duly authorized representative and Executive
has hereunto set his hand, all as of the date and year first above written.

                                       CLEVELAND-CLIFFS INC

                                       By /s/ M. Thomas Moore
                                         --------------------------------------
                                         Chairman and Chief
                                          Executive Officer


                                        /s/ Thomas J. O'Neil
                                        ---------------------------------------
                                        Thomas J. O'Neil
<PAGE>   22

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

                   This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated as of June 30, 1997, by and between Cleveland-Cliffs Inc, an Ohio
corporation ("Cleveland-Cliffs"), and John S. Brinzo, Social Security Number
___ , who is presently Executive Vice President - Finance of Cleveland-Cliffs 
(the "Executive"), amends and restates the Employment Agreement, dated as of 
February 1, 1992, between Cleveland-Cliffs and the Executive;

                                   WITNESSETH:
                                   -----------

                   WHEREAS, the Executive is a senior executive of
Cleveland-Cliffs and has made and is expected to continue to make major
contributions to the profitability, growth and financial strength of
Cleveland-Cliffs;

                   WHEREAS, Cleveland-Cliffs recognizes that, as is the case for
most publicly held companies, the possibility of a Change of Control (as that
term is hereafter defined) exists;

                   WHEREAS, Cleveland-Cliffs desires to assure itself of both
present and future continuity of management in the event of a Change of Control
and desires to establish certain minimum compensation rights of its senior
executives, including the Executive, applicable in the event of a Change of
Control;

                   WHEREAS, Cleveland-Cliffs wishes to ensure that its senior
executives are not practically disabled from discharging their duties upon a
Change of Control; and

                   WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits which the Executive could reasonably expect to
receive from Cleveland-Cliffs absent a Change of Control and, accordingly,
although effective and binding as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change of Control;

                   NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration including the Release provided for in Section 12
hereof, the receipt of which is hereby acknowledged, Cleveland-Cliffs and the
Executive agree as follows:

                   1. OPERATION OF AGREEMENT; CERTAIN DEFINITIONS:

                   (a) This Agreement is a continuation of the employment
agreement originally effective as of February 1, 1992 (the "Effective Date"),
but, anything in this Agreement to the contrary notwithstanding, this Agreement
shall not become operative unless and until there shall have occurred a Change
of Control. For 



<PAGE>   23
                                                                              2

purposes of this Agreement, a "Change of Control" shall have occurred if at any
time during the Term (as that term is hereafter defined) any of the following
events shall occur:

                  (i) Cleveland-Cliffs shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of Cleveland-Cliffs as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) A person, within the meaning of Section 3(a)(9) or of
         Section 13(d) (3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of Cleveland-Cliffs (whether directly or indirectly);
         or

                  (iv) During any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of Cleveland-Cliffs cease, for any reason, to constitute at
         least a majority thereof, unless the election, or the nomination for
         election by the shareholders of Cleveland-Cliffs, of each Director
         first elected during any such period was approved by a vote of at least
         one-third of the Directors of Cleveland-Cliffs who are Directors of
         Cleveland-Cliffs on the date of the beginning of any such period.

                  (b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.

                  (c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the Effective Date hereof and shall expire as
of the later of (i) the close of business on the eighth anniversary of the
Effective Date and (ii) the expiration of the Period of Employment (as that term
is hereafter defined); provided, however, that (A) this Agreement may be
continued in full force and effect for an additional period or periods of one
(1) year if Cleveland-Cliffs and the Executive mutually agree to such extension
or extensions, (B) this Agreement shall automatically renew for an additional 
period or periods of 


<PAGE>   24
                                                                               3

one (1) year if the end of the Term occurs during the period of any discussions
with any party that might ultimately result in the occurrence of a Change of
Control, and (C) subject to Section 14 hereof, if, prior to a Change of Control,
the Executive ceases for any reason to be an officer of Cleveland-Cliffs,
thereupon the Term shall be deemed to have expired and this Agreement shall
immediately terminate and be of no further effect.

                  (d) The term "Industry Service" shall mean professionally
related service, prior to his employment by Cleveland-Cliffs or its subsidiaries
and affiliates, by the Executive as an employee within the iron and steel
industry or an industry to which such Executive's position with Cleveland-Cliffs
relates. The Executive shall be given credit for one year of Industry Service
for every two years of service with Cleveland-Cliffs, as designated in writing
by, or in minutes of the actions of, the Compensation and Organization Committee
of the Board of Directors of Cleveland-Cliffs, and such years of credited
Industry Service shall be defined as "Credited Years of Industry Service."

                  2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms
and conditions of this Agreement, upon the occurrence of a Change of Control,
Cleveland-Cliffs shall continue the Executive in its employ and the Executive
shall remain in the employ of Cleveland-Cliffs for the period set forth in
Section 2(b) hereof (the "Period of Employment"), in the position and with
substantially the same duties and responsibilities that he had immediately prior
to the Change of Control, or to which Cleveland-Cliffs and the Executive may
hereafter mutually agree in writing. Throughout the Period of Employment, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of Cleveland-Cliffs as in effect for senior executives immediately
prior to the Change of Control) to the business and affairs of Cleveland-Cliffs,
but nothing in this Agreement shall preclude the Executive from devoting
reasonable periods of time during normal business hours to (i) serving as a
director, trustee or member of or participant in any organization or business so
long as such activity would not constitute Competitive Activity (as described in
Section 11 hereof), (ii) engaging in charitable and community activities, or
(iii) managing his personal investments. The business, assets, and properties of
Cleveland-Cliffs, as well as the support services and facilities available to
the Executive, shall not differ materially from those of Cleveland-Cliffs
immediately prior to the date of the Change of Control.

                  (b) The Period of Employment shall commence on the date of the
occurrence of a Change of Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the expiration of the third
anniversary of the occurrence of the Change of Control, or (ii) the Executive's
death.


<PAGE>   25
                                                                               4

                   3. COMPENSATION DURING PERIOD OF EMPLOYMENT: During the
Period of Employment the Executive shall receive and be entitled to the
following:

                  (a) an annual base salary at a rate not less than the
Executive's annual fixed or base compensation (payable monthly or otherwise as
in effect for senior executives of Cleveland-Cliffs immediately prior to the
occurrence of a Change of Control) or such higher rate as may be determined from
time to time by the Board of Directors of Cleveland-Cliffs (the "Board") or the
Organization and Compensation Committee thereof (the Committee") (which base
salary at such rate is herein referred to as "Base Pay"), reduced by any
disability benefits which the Executive receives under any Cleveland-Cliffs
disability program;

                  (b) participation, consistent with past practices, in
incentive compensation plans and arrangements of Cleveland-Cliffs in effect as
of the date of the Change of Control, as the same may subsequently be modified,
supplemented or replaced, including, without limitation, the Incentive Bonus
Plan and the 1992 Incentive Equity Plan (including the Long-Term Performance
Share Program), without material reduction in the reward opportunities available
to the Executive, and without reduction in the target bonus and target award
percentages applicable to the Executive immediately prior to the occurrence of a
Change of Control (with annual amounts and opportunities awarded pursuant to
such plans, programs and arrangements collectively referred to as "Incentive
Pay");

                  (c) participation in the Cleveland-Cliffs Inc Supplemental
Retirement Benefit Plan (As Amended and Restated as of January 1, 1997)
("Supplemental Retirement Plan" or "SRP"), as the same hereafter may be amended
prior to a Change of Control, and modified as provided in Section 6 hereof; and

                  (d) participation, consistent with past practices, in all
other employee benefit plans and practices of Cleveland-Cliffs in effect as of
the date of the Change of Control (including, without limitation, medical,
dental, hospitalization, health and welfare plans, life, long-term disability
and accident insurance programs, employee savings and investment plans, stock
ownership plans and retirement plans and supplemental arrangements), as the same
may be modified, supplemented or replaced without material reduction in total
value of the benefits to Executive (collectively, "Employee Benefits").

                   4. TERMINATION FOLLOWING A CHANGE OF CONTROL: (a) In the
event of the occurrence of a Change of Control, the Executive's employment may
be terminated by Cleveland-Cliffs during the Period of Employment and the
Executive shall be entitled to the benefits provided by Section 5 unless such
termination is the result of the occurrence of one or more of the following
events:

                   (i) The Executive's death; or


<PAGE>   26
                                                                               5

                   (ii) The Executive's employment is terminated for Cause.

For purposes of this Agreement, "Cause" shall mean that, prior to any
termination pursuant to Section 4(b), the Executive shall have committed any act
that is materially inimical to the best interests of Cleveland-Cliffs and that
constitutes common law fraud, a felony, or other gross malfeasance of duty. 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 his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive committed an act set
forth in this Section 4(a) and specifying the particulars thereof in detail.
Nothing herein shall limit the right of the Executive or his beneficiaries to
contest the validity or propriety of any such determination.

                  (b) During the Period of Employment the Executive shall be
entitled to the benefits as provided in Section 5 hereof upon the occurrence of
one or more of the following events:

                  (i) The Executive's "Disability", shall be deemed to have
         occurred six (6) months after the Executive shall have become totally
         and permanently disabled by bodily or mental injury or disease so as to
         be prevented thereby from engaging in any executive employment or
         occupation for remuneration or profit, as determined and certified to
         Cleveland-Cliffs and the Executive by The Cleveland Clinic (or if it is
         unwilling or unable to act, by one or more physicians designated for
         such purpose by the Cleveland Academy of Medicine or its successor
         organization); or

                  (ii)  Termination by the Executive of his employment
         with Cleveland-Cliffs upon the occurrence of any of the
         following events:

                           (A) The failure to elect, reelect or otherwise to
                  maintain the Executive in the office or position, or a
                  substantially equivalent office or position, of or with
                  Cleveland-Cliffs which the Executive held immediately prior to
                  a Change of Control, or the removal of, or failure to reelect,
                  the Executive as a Director of Cleveland-Cliffs (or any
                  successor thereto), if the Executive shall have been a
                  Director of Cleveland-Cliffs immediately prior to the Change
                  of Control;

                           (B) (I) A significant adverse change in the nature or
                  scope of the authorities, powers, functions, responsibilities
                  or duties attached to the position with Cleveland-Cliffs which
                  the Executive held immediately prior to the Change of 
                  Control, (II) a reduction in the



<PAGE>   27
                                                                               6

                  aggregate of the Executive's Base Pay and Incentive Pay
                  received from Cleveland-Cliffs, or a reduction in the
                  Executive's opportunities for Incentive Pay (including, but
                  not limited to, a reduction in target bonus percentage or
                  target award opportunity (whether measured by number of
                  performance shares or management objectives)) provided by
                  Cleveland-Cliffs, or (III) a reduction or termination of any
                  benefits described in Section 3(c) or (d) hereof to which the
                  Executive was entitled immediately prior to the Change of
                  Control, any of which is not remedied by Cleveland-Cliffs
                  within 10 calendar days after receipt by Cleveland-Cliffs of
                  written notice from the Executive of such change, reduction or
                  termination, as the case may be;

                           (C) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by Cleveland-Cliffs by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change of Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change of Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  the Executive's performance of, or has caused the Executive to
                  suffer a substantial reduction in, any of the authorities,
                  powers, functions, responsibilities or duties attached to the
                  position held by the Executive immediately prior to the Change
                  of Control, which situation is not remedied by
                  Cleveland-Cliffs within ten calendar days after written notice
                  to Cleveland-Cliffs from the Executive of such determination;

                           (D) The liquidation, dissolution, merger,
                  consolidation or reorganization of Cleveland-Cliffs or the
                  transfer of all or a significant portion of its business
                  and/or assets, unless the successor or successors (by
                  liquidation, merger, consolidation, reorganization or
                  otherwise) to which all or a significant portion of its
                  business and/or assets have been transferred (directly or by
                  operation of law) shall have assumed all duties and
                  obligations of Cleveland-Cliffs under this Agreement pursuant
                  to Section 16 hereof;

                           (E) The relocation of Cleveland-Cliffs' principal
                  executive offices, or a requirement that the Executive change
                  his principal location of work to any location which is in
                  excess of 25 miles from the location thereof immediately prior
                  to the Change of Control, or a requirement that the Executive
                  travel away from his office in the course of discharging his



<PAGE>   28
                                                                               7

                  responsibilities or duties hereunder at least 20% more (in
                  terms of aggregate days in any calendar year or in any
                  calendar quarter when annualized for purposes of comparison to
                  any prior year) than was required of him prior to the Change
                  of Control without, in any case described above, the prior
                  written consent of the Executive; or

                           (F) Without limiting the generality or effect of the
                  foregoing, any material breach of this Agreement by
                  Cleveland-Cliffs or any successor thereto.

                  (c) A termination by Cleveland-Cliffs pursuant to Section 4(a)
hereof other than for Cause or by the Executive pursuant to Section 4(b) hereof
shall not affect any rights which the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of Cleveland-Cliffs, which
rights shall be governed by the terms thereof, subject, however, to the
modifications in Section 6 hereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the Executive is not
entitled to any payments under Sections 3 or 5 hereof, the Executive shall have
no further obligation or liability to Cleveland-Cliffs hereunder with respect to
his prior or any future employment by Cleveland-Cliffs.

                  5. SEVERANCE COMPENSATION: If Cleveland-Cliffs shall terminate
the Executive's employment during the Period of Employment, other than pursuant
to Cause under Section 4(a) hereof, or if the Executive shall terminate his
employment pursuant to Section 4(b) hereof, then in lieu of any further payments
to the Executive for periods subsequent to the date of the Executive's
termination of employment (the "Termination Date"), the date of which shall be
the date of termination or such other date that may be specified by the
Executive if the termination is pursuant to Section 4(b) hereof,
Cleveland-Cliffs shall provide Severance Compensation to the Executive as
described below:

                  (a) SEVERANCE PAY. Within five business days after the
Termination Date:

                  (i) Cleveland-Cliffs shall pay to the Executive a lump sum
         payment (the "Severance Payment") in an amount equal to the present
         value (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
         such rate is so prescribed, a rate equal to the then "applicable
         interest rate" under Section 417(e)(3)(A)(ii)(II) of the Code for the
         month in which the Termination Date occurs (the "Discount Rate")) of

                           (A) the amount of Base Pay that would have been paid
                  to the Executive pursuant to Section 3(a) for the greater of
                  (I) one year or (II) the duration of the


<PAGE>   29
                                                                               8


                  Period of Employment, in each case if the termination had not
                  taken place (at the rate in effect immediately prior to the
                  Change of Control or prior to the Termination Date, whichever
                  is higher) and, if the Termination is on account of the
                  Executive's Disability, reduced by the amount of disability
                  benefits that would have been paid to the Executive for the
                  duration of the Period of Employment if the termination had
                  not taken place; plus

                           (B) the amount of Average Incentive Pay (as that term
                  is hereinafter defined) that would have been paid to the
                  Executive pursuant to Section 3(b) for the greater of (I) one
                  year or (II) the duration of the Period of Employment if the
                  termination had not taken place.

                  For purposes of this Agreement, Average Incentive Pay for any
                  12 month period shall mean an amount which is the greater of
                  (III) the average amount of Incentive Pay (as defined in
                  Section 3(b) hereof) awarded to the Executive for the three
                  calendar years immediately prior to the Termination Date, or
                  (IV) the amount of the most recent award of Incentive Pay.

                  (ii) Cleveland-Cliffs shall pay to the Executive 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 at or after the
         end of the Period of Employment under the SRP, as the same may be
         further amended prior to a Change of Control and as modified by Section
         6 hereof (assuming Base Salary at the rate in effect immediately prior
         to the occurrence of Change of Control and Incentive Pay equivalent to
         the amount of Average Incentive Pay), if the Executive had remained in
         the full-time employment of Cleveland-Cliffs until the end of the
         Period of Employment.

         The calculation of the SRP Payment and its actuarial equivalence shall
         be made as of the date the Executive is terminated. The lump sum of
         actuarial equivalence shall be calculated as of the end of the Period
         of Employment using the assumptions and factors used in the SRP, and
         such sums shall be discounted to the date of payment using the Discount
         Rate.

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

                   (b) EMPLOYEE BENEFITS. For the greater of (i) one year or
(ii) the duration of the Period of Employment, Cleveland-Cliffs shall arrange to
provide the Executive with Employee Benefits substantially similar to those 
which the Executive was receiving 


<PAGE>   30
                                                                               9


or entitled to receive immediately prior to the Termination Date as described in
Section 3(d) (and if and to the extent that such benefits shall not or cannot be
paid or provided under any policy, plan, program or arrangement of
Cleveland-Cliffs solely due to the fact that the Executive is no longer an
officer or employee of Cleveland-Cliffs, then Cleveland-Cliffs shall itself pay
or provide for the payment to the Executive, his dependents and beneficiaries,
such Employee Benefits). Without otherwise limiting the purposes or effect of
this Section 5(b), Employee Benefits payable to the Executive pursuant to this
Section 5(b) by reason of any "welfare benefit plan" of Cleveland-Cliffs (as the
term "welfare benefit plan" is defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) shall be reduced
to the extent comparable welfare benefits are actually received by the Executive
from another employer during the period beginning upon the occurrence of the
Termination Date and ending upon the last day during which Cleveland-Cliffs is
required to provide such Employee Benefits pursuant to the first sentence of
this Section 5(b).

                  (c) STOCK OPTIONS, RESTRICTED STOCK AND PERFORMANCE SHARES.
Upon the Termination Date, (i) all Stock Options granted to the Executive
pursuant to the 1992 Incentive Equity Plan, or any successor plan or similar
plan, shall be vested, (ii) the restrictions on any restricted stock awarded to
the Executive under the 1992 Incentive Equity Plan, or any successor plan or
similar plan, shall be released, and (iii) all Performance Share Awards under
the Long-Term Performance Share Program under the 1992 Incentive Equity Plan for
which the measurement period has not yet expired shall be earned assuming
management objectives have been met at the target level.

                  (d) METHOD OF PAYMENT. Upon written notice given by the
Executive to Cleveland-Cliffs prior to the occurrence of a Change of Control,
the Executive, at his sole option, without adjustment to reflect the present
value of such amounts as aforesaid, may elect to have all or any of the
Severance Payment described in Section 5(a) hereof paid to him on a quarterly or
monthly basis during the time remaining until the expiration of the third
anniversary of the Change of Control.

                  (e) OUTPLACEMENT COUNSELING. Cleveland-Cliffs shall reimburse
the Executive for reasonable expenses incurred for outplacement counseling (i)
which are pre-approved by the Chief Human Resources Officer of Cleveland-Cliffs,
(ii) which do not exceed 15% of the Executive's annual Base Pay, and (iii) which
are incurred by the Executive within six months following the Termination Date.

                  (f) SET-OFF AND COUNTERCLAIM. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation against any
payment to or benefit for the Executive provided for in this Agreement.


<PAGE>   31
                                                                              10

                  (g) INTEREST. Without limiting the rights of the Executive at
law or in equity, if Cleveland-Cliffs fails to make any payment required to be
made hereunder on a timely basis, Cleveland-Cliffs shall pay interest on the
amount thereof at an annualized rate of interest equal to the then-applicable
Discount Rate.

                  (h) CALCULATION. The calculation of all payments of
compensation and other benefits to be provided to Executive under this Agreement
(other than payments pursuant to Section 8 hereof) shall be made by Hewitt
Associates ("Hewitt"), or such other actuarial firm selected by
Cleveland-Cliffs' independent accountants and satisfactory to Executive.
Cleveland-Cliffs shall provide to such actuarial firm all information requested
by such actuarial firm as necessary for or helpful to it to make the
calculations hereunder.

                  6. SUPPLEMENTAL RETIREMENT PLAN. Cleveland-Cliffs hereby
waives the discretionary right, at any time subsequent to the date of a Change
of Control, to amend or terminate the SRP as to Executive as provided in
paragraph 8 thereof or to terminate the rights of Executive or his beneficiary
under the SRP in the event Executive engages in a competitive business as
provided in any plan or arrangement between Cleveland-Cliffs 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 Section 6 shall constitute a "Supplemental Agreement" as defined in
Paragraph 1.J of the SRP. If Cleveland-Cliffs shall terminate the Executive's
employment during the Period of Employment, other than for Cause pursuant to
Section 4(a) hereof, or if the Executive shall terminate his employment pursuant
to Section 4(b) hereof, or if, following the end of the Period of Employment,
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) The Executive shall be credited with years of continuous
service at the time of his termination of employment with Cleveland-Cliffs (by
death or otherwise) 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 Cleveland-Cliffs until the
expiration of the third anniversary of the Change of Control, and had he
attained the greater of (iii) his actual chronological age or (iv) his
chronological age at the expiration of the third anniversary of the Change of
Control. 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. The Executive shall be eligible to commence the 30-year
pension benefit on the earlier of (v) the date upon which the Executive would
have otherwise reached 30 years of continuous service with Cleveland-Cliffs but
for his termination of employment after the Change of Control, or (vi) the 
date upon 



<PAGE>   32
                                                                              11

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 (as defined in Section 1(d) hereof) is equal to 30 years; and

                   (b) The Executive shall be a "Participant" in the SRP,
notwithstanding any limitations therein.

A copy of the SRP is attached to this Agreement as Exhibit A. The SRP is
incorporated in all respects herein; provided, however, that the terms of this
Agreement shall take precedence to the extent they are contrary to provisions
contained in the SRP.

                   7. WELFARE BENEFIT CONTINUATION FOLLOWING TERMINATION AFTER
PERIOD OF EMPLOYMENT. Following the later of the end of the Period of
Employment, or Executive's termination of employment with Cleveland-Cliffs,
Cleveland-Cliffs shall:

                  (a) Provide medical, hospital, surgical and prescription drug
coverage, equivalent to that furnished on February 1, 1992 to officers who
retire after January 1, 1990 by Cleveland-Cliffs, to the Executive and his
spouse for their lifetimes, and to eligible dependents of the Executive for
their periods of eligibility, through insurance or otherwise;

                  (b) Provide life insurance on the Executive, equivalent to
that furnished on February 1, 1992 to officers who retire after January 1, 1990
by Cleveland-Cliffs, to the Executive for his lifetime; and

                  (c) Without otherwise limiting the purposes or effect of this
Section 7 hereof, welfare benefits payable to the Executive or his spouse or
dependents pursuant to this Section 7 shall be reduced to the extent comparable
welfare benefits are payable pursuant to Section 5(b) hereof or are actually
received by the Executive or his spouse or dependents from another employer.

                  8. CERTAIN ADDITIONAL PAYMENTS BY CLEVELAND-CLIFFS. (a)
Anything in this Agreement to the contrary notwithstanding, in the event that
this Agreement shall become operative and it shall be determined (as hereafter
provided) that any payment or distribution by Cleveland-Cliffs to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, 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 by reason of being considered
"contingent on a change in ownership or control" of the Corporation, 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 


<PAGE>   33
                                                                              12

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 this Agreement, 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.

                  (b) 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 Cleveland-Cliffs to
the Executive and the amount of such Gross-Up Payment, if any, shall be made by
a nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both
Cleveland-Cliffs 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
Cleveland-Cliffs or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, Cleveland-Cliffs shall pay the required
Gross-Up Payment to the Executive within five 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 Cleveland-Cliffs 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
Cleveland-Cliffs should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that Cleveland-Cliffs
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 Cleveland-Cliffs and the Executive as promptly
as possible. Any such Underpayment shall be promptly paid by Cleveland-Cliffs 
to, or for the benefit of, the 


<PAGE>   34
                                                                              13


Executive within five business days after receipt of such determination and
calculations.

                  (c) Cleveland-Cliffs and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of Cleveland-Cliffs 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 Cleveland-Cliffs and the Executive.

                  (d) 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 Cleveland-Cliffs, provide to
Cleveland-Cliffs 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 Cleveland-Cliffs,
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 five business days pay to Cleveland-Cliffs
the amount of such reduction.

                  (e) 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 Cleveland-Cliffs. If such fees
and expenses are initially paid by the Executive, Cleveland-Cliffs shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof.

                  (f) The Executive shall notify Cleveland-Cliffs in writing of
any claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by Cleveland-Cliffs 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 Cleveland-Cliffs 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 Cleveland-Cliffs and (ii) the date that
any payment of amount with respect to such claim is due. If Cleveland-Cliffs 
notifies the Executive in 


<PAGE>   35
                                                                              14

writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

                       (i)  provide Cleveland-Cliffs with any written
                  records or documents in his possession relating to such
                  claim reasonably requested by Cleveland-Cliffs;

                      (ii) take such action in connection with contesting such
                  claim as Cleveland-Cliffs 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 Cleveland-Cliffs;

                     (iii)  cooperate with Cleveland-Cliffs in good faith
                  in order effectively to contest such claim; and

                      (iv)  permit Cleveland-Cliffs to participate in any
                  proceedings relating to such claim;

         PROVIDED, HOWEVER, that Cleveland-Cliffs 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,
         Cleveland-Cliffs 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 Cleveland-Cliffs shall determine;
         PROVIDED, HOWEVER, that if Cleveland-Cliffs directs the Executive to
         pay the tax claimed and sue for a refund, Cleveland-Cliffs 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, Cleveland-Cliffs's control of any such contested 



<PAGE>   36
                                                                              15

         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.

                  (g) If, after the receipt by the Executive of an amount
advanced by Cleveland-Cliffs pursuant to Subsection (f) of this Section, the
Executive receives any refund with respect to such claim, the Executive shall
(subject to Cleveland-Cliffs's complying with the requirements of Subsection (f)
of this Section) promptly pay to Cleveland-Cliffs 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
Cleveland-Cliffs pursuant to Subsection (f) of this Section, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and Cleveland-Cliffs 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
Cleveland-Cliffs to the Executive pursuant to this Section.

                  9. NO MITIGATION OBLIGATION: Cleveland-Cliffs hereby
acknowledges that it will be difficult, and may be impossible, for the Executive
to find reasonably comparable employment following the Termination Date and that
the non-competition covenant contained in Section 11 hereof will further limit
the employment opportunities for the Executive. Accordingly, the parties hereto
expressly agree that except as expressly provided in Sections 5(b) and 7 hereof,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.

                  10. CONFIDENTIALITY: The Executive acknowledges that all trade
secrets, customer lists, and other confidential business information are the
exclusive property of Cleveland-Cliffs, and the Executive shall not at any time
during the Term of this Agreement or at any time thereafter, directly or
indirectly reveal or cause to be revealed to any person or entity the trade
secrets, customer lists and other confidential business information obtained as
a result of the Executive's employment or relationship with Cleveland-Cliffs.

                  11. COMPETITIVE ACTIVITY: For a period of twenty-four (24)
months from and after any termination of employment following the occurrence of
a Change of Control, the Executive shall not become an officer, director, joint
venturer, employee, consultant, 5-percent or more shareholder (directly or
indirectly), or promote or assist (financially or otherwise) any entity which
competes in 


<PAGE>   37
                                                                              16

any business in which Cleveland-Cliffs or any of its affiliates are engaged as
of the date-of the Change of Control. For this purpose, business is defined as
the iron and steel industry. The provisions of this Section 11 shall, following
a Change of Control, supersede and be in lieu of any similar provision in any
other plan or agreement involving Cleveland-Cliffs and the Executive, whether
now existing or hereinafter adopted or entered into, including, but not limited
to, the SRP.

                  12. RELEASE: Payment of the Severance Compensation set forth
in Section 5 hereof is conditioned upon the Executive executing and delivering a
release (the "Release") satisfactory to Cleveland-Cliffs releasing
Cleveland-Cliffs, its directors, employees and affiliates from any and all
claims, demands, damages, actions and/or causes of action whatsoever, which the
Executive may have had on account of the termination of his employment,
including, but not limited to claims of discrimination, including on the basis
of sex, race, age, national origin, religion, or handicapped status (with all
applicable periods during which the Executive may revoke the Release or any
provision thereof having expired), and any and all claims, demands and causes of
action for retirement (other than under any "pension benefit plan" or under any
"welfare benefit plan" of Cleveland- Cliffs (as the terms "pension benefit plan"
and "welfare benefit plan" are defined in Section 3 of ERISA) other than the
SRP), severance or other termination pay, and because pursuant to Section 5(a)
the Executive is entitled to lump sum payments of Incentive Pay and benefits
under the SRP, under the SRP and any incentive compensation plans and
arrangements of Cleveland-Cliffs described in Section 3(b). Such Release shall
not, however, apply to the obligations of Cleveland-Cliffs arising under this
Agreement, or rights of indemnification the Executive may have under the
Regulations of Cleveland-Cliffs or by contract or by statute.

                  13. LEGAL FEES AND EXPENSES: (a) It is the intent of
Cleveland-Cliffs that the Executive not be required to incur any expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Executive hereunder.
Accordingly, if it should appear to the Executive that Cleveland-Cliffs has
failed to comply with any of its obligations under this Agreement or in the
event that Cleveland-Cliffs or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Executive the benefits intended to be provided to the
Executive hereunder, Cleveland-Cliffs irrevocably authorizes the Executive from
time to time to retain counsel of his choice, at the expense of Cleveland-Cliffs
as hereafter provided, to represent the Executive in connection with the
initiation or defense of any such litigation or other legal action, whether by
or against Cleveland-Cliffs or any Director, officer, stockholder or other
person affiliated with Cleveland-Cliffs, in any jurisdiction. Notwithstanding
any existing or prior attorney-



<PAGE>   38
                                                                              17

client relationship between Cleveland-Cliffs and such counsel, Cleveland-Cliffs
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection Cleveland-Cliffs and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. Cleveland-Cliffs shall promptly pay or cause to be
paid and shall be solely responsible for any and all attorneys' and related fees
and expenses incurred by the Executive as a result of Cleveland-Cliffs' failure
to perform this Agreement or any provision hereof or as a result of
Cleveland-Cliffs or any person contesting the validity or enforceability of this
Agreement or any provision hereof as aforesaid.

                  (b) To ensure that the provisions of this Agreement can be
enforced by Executive, certain trust arrangements ("Trusts") have been
established between KeyTrust Company of Ohio, N.A., as Trustee ("Trustee"), and
Cleveland-Cliffs. Trust Agreement No. 1 (Amended and Restated Effective June 1,
1997) ("Trust Agreement No. 1") dated June 12, 1997, and Trust Agreement No. 2
(Amended and Restated Effective June 1, 1997) ("Trust Agreement No. 2") dated
June 12, 1997, as amended and/or restated, between the Trustee and
Cleveland-Cliffs, are attached as Exhibits B and C, respectively. A Trust
Agreement No. 7 ("Trust Agreement No. 7") dated April 9, 1991, as amended,
between the Trustee and Cleveland-Cliffs, is attached as Exhibit D. Each such
Trust Agreement shall be considered a part of this Agreement and shall set forth
the terms and conditions relating to payment under Trust Agreement No. 1 of
compensation and other benefits pursuant to Sections 3, 5 and 8 and pension
benefits pursuant to Sections 3, 5 and 6 owed by Cleveland-Cliffs, payment from
Trust Agreement No. 7 of certain pension benefits pursuant to Sections 3, 5 and
6 owed by Cleveland-Cliffs, and payment from Trust Agreement No. 2 for
attorneys' fees and related fees and expenses pursuant to Section 13(a) hereof
owed by Cleveland-Cliffs. Executive shall make demand on Cleveland-Cliffs for
any payments due Executive pursuant to Section 13(a) hereof prior to making
demand therefor on the Trustee under Trust Agreement No. 2.

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

                  (A) 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 of Control (or on such fifth business day if
         the Board has declared a Change of Control to be imminent) of the
         payments to be made to Executive under the provisions of Sections 3, 5,
         6 and 8 hereof, such present value to be computed using the assumptions
         set forth in Section 5(a) hereof and the computations provided for in
         Section 8 hereof less (II) the balance in the Executive's account
         provided for in Section 7(b) of Trust Agreement No. 1 as of the most
         recent 


<PAGE>   39
                                                                              18

         completed valuation thereof, less (III) the balance in the Executive's
         account provided for in Section 7(b) of Trust Agreement No. 7 as of the
         most recent completed valuation thereof, as certified by the Trustee
         under each of Trust Agreement No. 1 and Trust Agreement No. 7;
         provided, however, that if the Trustee under Trust Agreement No. 1
         and/or Trust Agreement No. 7, respectively, does not so certify by the
         end of the fourth (4th) business day after the earlier of such Change
         of Control or declaration, then the balance of such respective account
         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
         Cleveland-Cliffs' obligation to pay compensation, pension and other
         benefits hereunder, it being the intent of Cleveland-Cliffs that assets
         in such Trusts be held as security for Cleveland- Cliffs' obligation to
         pay compensation, pension and other benefits under this Agreement; and

                  (B) 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 Executive's attorneys' and related
         fees and expenses by the Trustee pursuant to Trust Agreement No. 2
         shall, to the extent thereof, discharge Cleveland-Cliffs' obligation
         hereunder, it being the intent of Cleveland-Cliffs that assets in such
         Trust be held as security for Cleveland- Cliffs' obligation under
         Section 13(a) hereof. Executive understands and acknowledges that the
         entire corpus of the Trust under Trust Agreement No. 2 will be $250,000
         and that said amount will be available to discharge not only the
         obligations of the Cleveland-Cliffs to Executive under Section 13(a)
         hereof, but also similar obligations of the Cleveland-Cliffs to other
         executives and employees under similar provisions of other agreements
         and plans.

                  14. EMPLOYMENT RIGHTS: Nothing expressed or implied in this
Agreement shall create any right or duty on the part of Cleveland-Cliffs or the
Executive to have the Executive remain in the employment of Cleveland-Cliffs at
any time prior to a Change of Control; provided, however, that any termination
of employment of the Executive or the removal of the Executive from the office
or position in Cleveland-Cliffs following the commencement of any discussion
with a third person that ultimately results in a Change of Control shall be
deemed to be a termination or removal of the Executive after a Change of Control
for purposes of this Agreement. Executive expressly acknowledges that he is an
employee at will, and that Cleveland-Cliffs may terminate him at any time during
the Period of Employment for any reason if Cleveland-Cliffs pays the Severance
Compensation provided for under Section 5 of this Agreement, and otherwise
comply with its other continuing covenants in this Agreement, including without
limitation, Sections 3 and 6.


<PAGE>   40
                                                                              19


                   15. WITHHOLDING OF TAXES: Cleveland-Cliffs may withhold from
any amounts payable under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or government regulation or ruling.

                   16. SUCCESSORS AND BINDING AGREEMENT: (a) Cleveland-Cliffs
shall require any successor (including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of
Cleveland-Cliffs whether by purchase, merger, consolidation, reorganization or
otherwise, and such successor shall thereafter be deemed "Cleveland-Cliffs" for
the purposes of this Agreement), by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent Cleveland-Cliffs would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of Cleveland-Cliffs and any successor
to Cleveland-Cliffs but shall not otherwise be assignable, transferable or
delegable by Cleveland-Cliffs.

                   (b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.

                   (c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 16. Without limiting the generality of the
foregoing, the 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 will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 16, Cleveland-Cliffs shall have no liability
to pay any amount so attempted to be assigned, transferred or delegated.

                   (d) The agreement of Cleveland-Cliffs to make payments and/or
provide benefits hereunder shall represent an unsecured obligation of
Cleveland-Cliffs.

                   (e) Cleveland-Cliffs and the Executive recognize that each
party will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach,
Cleveland-Cliffs and the Executive hereby agree and consent that the other shall
be entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.

                   17. NOTICE: For all purposes of this Agreement, all
communications including without limitation notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been mailed by
United States registered 


<PAGE>   41
                                                                              20


or certified mail, return receipt requested, postage prepaid, addressed to such
party's address as specified below, or at such other address as such party shall
specify by notice to the other. If to Cleveland-Cliffs, to:

                       Cleveland-Cliffs Inc
                       1100 Superior Avenue
                       Cleveland, Ohio  44114-2589
                       Attention:  Secretary

If to the Executive, to the last address shown on the records of
Cleveland-Cliffs. Notices of change of address shall be effective only upon
receipt.

                   18. GOVERNING LAW: The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws of such State.

                   19. VALIDITY: If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement 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.

                   20. AMENDMENT: This Agreement may be amended only by a
written instrument signed by the parties hereto, which makes specific reference
to this Agreement.

                   21. RIGHTS UNDER OTHER PLANS AND PROGRAMS: Anything in this
Agreement to the contrary notwithstanding, no provision of this Agreement is
intended, nor shall it be construed, to reduce or in any way restrict any
benefit to which Executive may be entitled under any other agreement, plan or
program providing benefits for Executive, including but not limited to the plans
described in Sections 3 and 5 of this Agreement.

                   22. MISCELLANEOUS: No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and Cleveland-Cliffs. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

                   23. COUNTERPARTS: This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an 


<PAGE>   42
                                                                              21

original but all of which together will constitute one and the same agreement.

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

                  IN WITNESS WHEREOF, Cleveland-Cliffs has caused this Agreement
to be executed on its behalf by its duly authorized representative and Executive
has hereunto set his hand, all as of the date and year first above written.

                                           CLEVELAND-CLIFFS INC


                                           By /s/ M. Thomas Moore
                                             ----------------------------------
                                             Chairman and Chief 
                                               Executive Officer


                                           /s/ John S. Brinzo
                                           ------------------------------------
                                           John S. Brinzo


<PAGE>   43

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

                  This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated as of June 30, 1997, by and between Cleveland-Cliffs Inc, an Ohio
corporation ("Cleveland-Cliffs"), and M. Thomas Moore, Social Security Number
___ , who is presently Chairman and Chief Executive Officer of Cleveland-
Cliffs (the "Executive"), amends and restates the Employment Agreement, dated 
as of February 1, 1992, between Cleveland-Cliffs and the Executive;

                                   WITNESSETH:

                  WHEREAS, the Executive is a senior executive of
Cleveland-Cliffs and has made and is expected to continue to make major
contributions to the profitability, growth and financial strength of
Cleveland-Cliffs;

                  WHEREAS, Cleveland-Cliffs recognizes that, as is the case for
most publicly held companies, the possibility of a Change of Control (as that
term is hereafter defined) exists;

                  WHEREAS, Cleveland-Cliffs desires to assure itself of both
present and future continuity of management in the event of a Change of Control
and desires to establish certain minimum compensation rights of its senior
executives, including the Executive, applicable in the event of a Change of
Control;

                  WHEREAS, Cleveland-Cliffs wishes to ensure that its senior
executives are not practically disabled from discharging their duties upon a
Change of Control; and

                  WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits which the Executive could reasonably expect to
receive from Cleveland-Cliffs absent a Change of Control and, accordingly,
although effective and binding as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change of Control;

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration including the Release provided for in Section 12
hereof, the receipt of which is hereby acknowledged, Cleveland-Cliffs and the
Executive agree as follows:

                   1. OPERATION OF AGREEMENT; CERTAIN DEFINITIONS:

                   (a) This Agreement is a continuation of the employment
agreement originally effective as of February 1, 1992 (the "Effective Date"),
but, anything in this Agreement to the contrary notwithstanding, this Agreement
shall not become operative unless and until there shall have occurred a Change
of Control. For



<PAGE>   44


                                                                               2

purposes of this Agreement, a "Change of Control" shall have occurred if at any
time during the Term (as that term is hereafter defined) any of the following
events shall occur:

                  (i) Cleveland-Cliffs shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of Cleveland-Cliffs as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) A person, within the meaning of Section 3(a)(9) or of
         Section 13(d) (3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of Cleveland-Cliffs (whether directly or indirectly);
         or

                  (iv) During any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of Cleveland-Cliffs cease, for any reason, to constitute at
         least a majority thereof, unless the election, or the nomination for
         election by the shareholders of Cleveland-Cliffs, of each Director
         first elected during any such period was approved by a vote of at least
         one-third of the Directors of Cleveland-Cliffs who are Directors of
         Cleveland-Cliffs on the date of the beginning of any such period.

                  (b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.

                  (c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the Effective Date hereof and shall expire as
of the later of (i) the close of business on the eighth anniversary of the
Effective Date and (ii) the expiration of the Period of Employment (as that term
is hereafter defined); provided, however, that (A) this Agreement may be
continued in full force and effect for an additional period or periods of one
(1) year if Cleveland-Cliffs and the Executive mutually agree to such extension
or extensions, (B) this Agreement shall automatically renew for an additional
period or periods of 



<PAGE>   45
                                                                               3

one (1) year if the end of the Term occurs during the period of any discussions
with any party that might ultimately result in the occurrence of a Change of
Control, and (C) subject to Section 14 hereof, if, prior to a Change of Control,
the Executive ceases for any reason to be an officer of Cleveland-Cliffs,
thereupon the Term shall be deemed to have expired and this Agreement shall
immediately terminate and be of no further effect.

                  (d) The term "Industry Service" shall mean professionally
related service, prior to his employment by Cleveland-Cliffs or its subsidiaries
and affiliates, by the Executive as an employee within the iron and steel
industry or an industry to which such Executive's position with Cleveland-Cliffs
relates. The Executive shall be given credit for one year of Industry Service
for every two years of service with Cleveland-Cliffs, as designated in writing
by, or in minutes of the actions of, the Compensation and Organization Committee
of the Board of Directors of Cleveland-Cliffs, and such years of credited
Industry Service shall be defined as "Credited Years of Industry Service."

                  2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms
and conditions of this Agreement, upon the occurrence of a Change of Control,
Cleveland-Cliffs shall continue the Executive in its employ and the Executive
shall remain in the employ of Cleveland-Cliffs for the period set forth in
Section 2(b) hereof (the "Period of Employment"), in the position and with
substantially the same duties and responsibilities that he had immediately prior
to the Change of Control, or to which Cleveland-Cliffs and the Executive may
hereafter mutually agree in writing. Throughout the Period of Employment, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of Cleveland-Cliffs as in effect for senior executives immediately
prior to the Change of Control) to the business and affairs of Cleveland-Cliffs,
but nothing in this Agreement shall preclude the Executive from devoting
reasonable periods of time during normal business hours to (i) serving as a
director, trustee or member of or participant in any organization or business so
long as such activity would not constitute Competitive Activity (as described in
Section 11 hereof), (ii) engaging in charitable and community activities, or
(iii) managing his personal investments. The business, assets, and properties of
Cleveland-Cliffs, as well as the support services and facilities available to
the Executive, shall not differ materially from those of Cleveland-Cliffs
immediately prior to the date of the Change of Control.

                  (b) The Period of Employment shall commence on the date of the
occurrence of a Change of Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the expiration of the third
anniversary of the occurrence of the Change of Control, or (ii) the Executive's
death.



<PAGE>   46


                                                                           4

                   3. COMPENSATION DURING PERIOD OF EMPLOYMENT: During the
Period of Employment the Executive shall receive and be entitled to the
following:

                  (a) an annual base salary at a rate not less than the
Executive's annual fixed or base compensation (payable monthly or otherwise as
in effect for senior executives of Cleveland-Cliffs immediately prior to the
occurrence of a Change of Control) or such higher rate as may be determined from
time to time by the Board of Directors of Cleveland-Cliffs (the "Board") or the
Organization and Compensation Committee thereof (the Committee") (which base
salary at such rate is herein referred to as "Base Pay"), reduced by any
disability benefits which the Executive receives under any Cleveland-Cliffs
disability program;

                  (b) participation, consistent with past practices, in
incentive compensation plans and arrangements of Cleveland-Cliffs in effect as
of the date of the Change of Control, as the same may subsequently be modified,
supplemented or replaced, including, without limitation, the Incentive Bonus
Plan and the 1992 Incentive Equity Plan (including the Long-Term Performance
Share Program), without material reduction in the reward opportunities available
to the Executive, and without reduction in the target bonus and target award
percentages applicable to the Executive immediately prior to the occurrence of a
Change of Control (with annual amounts and opportunities awarded pursuant to
such plans, programs and arrangements collectively referred to as "Incentive
Pay");

                  (c) participation in the Cleveland-Cliffs Inc Supplemental
Retirement Benefit Plan (As Amended and Restated as of January 1, 1997)
("Supplemental Retirement Plan" or "SRP"), as the same hereafter may be amended
prior to a Change of Control, and modified as provided in Section 6 hereof; and

                  (d) participation, consistent with past practices, in all
other employee benefit plans and practices of Cleveland-Cliffs in effect as of
the date of the Change of Control (including, without limitation, medical,
dental, hospitalization, health and welfare plans, life, long-term disability
and accident insurance programs, employee savings and investment plans, stock
ownership plans and retirement plans and supplemental arrangements), as the same
may be modified, supplemented or replaced without material reduction in total
value of the benefits to Executive (collectively, "Employee Benefits").

                   4. TERMINATION FOLLOWING A CHANGE OF CONTROL: (a) In the
event of the occurrence of a Change of Control, the Executive's employment may
be terminated by Cleveland-Cliffs during the Period of Employment and the
Executive shall be entitled to the benefits provided by Section 5 unless such
termination is the result of the occurrence of one or more of the following
events:

                   (i) The Executive's death; or



<PAGE>   47


                                                                               5

                        (ii) The Executive's employment is terminated for
                  Cause.

For purposes of this Agreement, "Cause" shall mean that, prior to any
termination pursuant to Section 4(b), the Executive shall have committed any act
that is materially inimical to the best interests of Cleveland-Cliffs and that
constitutes common law fraud, a felony, or other gross malfeasance of duty. 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 his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive committed an act set
forth in this Section 4(a) and specifying the particulars thereof in detail.
Nothing herein shall limit the right of the Executive or his beneficiaries to
contest the validity or propriety of any such determination.

                  (b) During the Period of Employment the Executive shall be
entitled to the benefits as provided in Section 5 hereof upon the occurrence of
one or more of the following events:

                  (i) The Executive's "Disability", shall be deemed to have
         occurred six (6) months after the Executive shall have become totally
         and permanently disabled by bodily or mental injury or disease so as to
         be prevented thereby from engaging in any executive employment or
         occupation for remuneration or profit, as determined and certified to
         Cleveland-Cliffs and the Executive by The Cleveland Clinic (or if it is
         unwilling or unable to act, by one or more physicians designated for
         such purpose by the Cleveland Academy of Medicine or its successor
         organization); or

                  (ii)  Termination by the Executive of his employment
         with Cleveland-Cliffs upon the occurrence of any of the
         following events:

                           (A) The failure to elect, reelect or otherwise to
                  maintain the Executive in the office or position, or a
                  substantially equivalent office or position, of or with
                  Cleveland-Cliffs which the Executive held immediately prior to
                  a Change of Control, or the removal of, or failure to reelect,
                  the Executive as a Director of Cleveland-Cliffs (or any
                  successor thereto), if the Executive shall have been a
                  Director of Cleveland-Cliffs immediately prior to the Change
                  of Control;

                           (B) (I) A significant adverse change in the nature or
                  scope of the authorities, powers, functions, responsibilities
                  or duties attached to the position with Cleveland-Cliffs which
                  the Executive held immediately prior to the Change of Control,
                  (II) a reduction in the



<PAGE>   48


                                                                               6

                  aggregate of the Executive's Base Pay and Incentive Pay
                  received from Cleveland-Cliffs, or a reduction in the
                  Executive's opportunities for Incentive Pay (including, but
                  not limited to, a reduction in target bonus percentage or
                  target award opportunity (whether measured by number of
                  performance shares or management objectives)) provided by
                  Cleveland-Cliffs, or (III) a reduction or termination of any
                  benefits described in Section 3(c) or (d) hereof to which the
                  Executive was entitled immediately prior to the Change of
                  Control, any of which is not remedied by Cleveland-Cliffs
                  within 10 calendar days after receipt by Cleveland-Cliffs of
                  written notice from the Executive of such change, reduction or
                  termination, as the case may be;

                           (C) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by Cleveland-Cliffs by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change of Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change of Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  the Executive's performance of, or has caused the Executive to
                  suffer a substantial reduction in, any of the authorities,
                  powers, functions, responsibilities or duties attached to the
                  position held by the Executive immediately prior to the Change
                  of Control, which situation is not remedied by
                  Cleveland-Cliffs within ten calendar days after written notice
                  to Cleveland-Cliffs from the Executive of such determination;

                           (D) The liquidation, dissolution, merger,
                  consolidation or reorganization of Cleveland-Cliffs or the
                  transfer of all or a significant portion of its business
                  and/or assets, unless the successor or successors (by
                  liquidation, merger, consolidation, reorganization or
                  otherwise) to which all or a significant portion of its
                  business and/or assets have been transferred (directly or by
                  operation of law) shall have assumed all duties and
                  obligations of Cleveland-Cliffs under this Agreement pursuant
                  to Section 16 hereof;

                           (E) The relocation of Cleveland-Cliffs' principal
                  executive offices, or a requirement that the Executive change
                  his principal location of work to any location which is in
                  excess of 25 miles from the location thereof immediately prior
                  to the Change of Control, or a requirement that the Executive
                  travel away from his office in the course of discharging his



<PAGE>   49


                                                                               7

                  responsibilities or duties hereunder at least 20% more (in
                  terms of aggregate days in any calendar year or in any
                  calendar quarter when annualized for purposes of comparison to
                  any prior year) than was required of him prior to the Change
                  of Control without, in any case described above, the prior
                  written consent of the Executive; or

                           (F) Without limiting the generality or effect of the
                  foregoing, any material breach of this Agreement by
                  Cleveland-Cliffs or any successor thereto.

                  (c) A termination by Cleveland-Cliffs pursuant to Section 4(a)
hereof other than for Cause or by the Executive pursuant to Section 4(b) hereof
shall not affect any rights which the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of Cleveland-Cliffs, which
rights shall be governed by the terms thereof, subject, however, to the
modifications in Section 6 hereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the Executive is not
entitled to any payments under Sections 3 or 5 hereof, the Executive shall have
no further obligation or liability to Cleveland-Cliffs hereunder with respect to
his prior or any future employment by Cleveland-Cliffs.

                  5. SEVERANCE COMPENSATION: If Cleveland-Cliffs shall terminate
the Executive's employment during the Period of Employment, other than pursuant
to Cause under Section 4(a) hereof, or if the Executive shall terminate his
employment pursuant to Section 4(b) hereof, then in lieu of any further payments
to the Executive for periods subsequent to the date of the Executive's
termination of employment (the "Termination Date"), the date of which shall be
the date of termination or such other date that may be specified by the
Executive if the termination is pursuant to Section 4(b) hereof,
Cleveland-Cliffs shall provide Severance Compensation to the Executive as
described below:

                   (a) SEVERANCE PAY. Within five business days after the
Termination Date:

                  (i) Cleveland-Cliffs shall pay to the Executive a lump sum
         payment (the "Severance Payment") in an amount equal to the present
         value (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
         such rate is so prescribed, a rate equal to the then "applicable
         interest rate" under Section 417(e)(3)(A)(ii)(II) of the Code for the
         month in which the Termination Date occurs (the "Discount Rate")) of

                           (A) the amount of Base Pay that would have been paid
                  to the Executive pursuant to Section 3(a) for the greater of
                  (I) one year or (II) the duration of the



<PAGE>   50


                                                                               8

                  Period of Employment, in each case if the termination had not
                  taken place (at the rate in effect immediately prior to the
                  Change of Control or prior to the Termination Date, whichever
                  is higher) and, if the Termination is on account of the
                  Executive's Disability, reduced by the amount of disability
                  benefits that would have been paid to the Executive for the
                  duration of the Period of Employment if the termination had
                  not taken place; plus

                           (B) the amount of Average Incentive Pay (as that term
                  is hereinafter defined) that would have been paid to the
                  Executive pursuant to Section 3(b) for the greater of (I) one
                  year or (II) the duration of the Period of Employment if the
                  termination had not taken place.

                  For purposes of this Agreement, Average Incentive Pay for any
                  12 month period shall mean an amount which is the greater of
                  (III) the average amount of Incentive Pay (as defined in
                  Section 3(b) hereof) awarded to the Executive for the three
                  calendar years immediately prior to the Termination Date, or
                  (IV) the amount of the most recent award of Incentive Pay.

                  (ii) Cleveland-Cliffs shall pay to the Executive 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 at or after the
         end of the Period of Employment under the SRP, as the same may be
         further amended prior to a Change of Control and as modified by Section
         6 hereof (assuming Base Salary at the rate in effect immediately prior
         to the occurrence of Change of Control and Incentive Pay equivalent to
         the amount of Average Incentive Pay), if the Executive had remained in
         the full-time employment of Cleveland-Cliffs until the end of the
         Period of Employment.

         The calculation of the SRP Payment and its actuarial equivalence shall
         be made as of the date the Executive is terminated. The lump sum of
         actuarial equivalence shall be calculated as of the end of the Period
         of Employment using the assumptions and factors used in the SRP, and
         such sums shall be discounted to the date of payment using the Discount
         Rate.

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

                   (b) EMPLOYEE BENEFITS. For the greater of (i) one year or
(ii) the duration of the Period of Employment, Cleveland-Cliffs shall arrange to
provide the Executive with Employee Benefits substantially similar to those
which the Executive was receiving



<PAGE>   51


                                                                               9

or entitled to receive immediately prior to the Termination Date as described in
Section 3(d) (and if and to the extent that such benefits shall not or cannot be
paid or provided under any policy, plan, program or arrangement of
Cleveland-Cliffs solely due to the fact that the Executive is no longer an
officer or employee of Cleveland-Cliffs, then Cleveland-Cliffs shall itself pay
or provide for the payment to the Executive, his dependents and beneficiaries,
such Employee Benefits). Without otherwise limiting the purposes or effect of
this Section 5(b), Employee Benefits payable to the Executive pursuant to this
Section 5(b) by reason of any "welfare benefit plan" of Cleveland-Cliffs (as the
term "welfare benefit plan" is defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) shall be reduced
to the extent comparable welfare benefits are actually received by the Executive
from another employer during the period beginning upon the occurrence of the
Termination Date and ending upon the last day during which Cleveland-Cliffs is
required to provide such Employee Benefits pursuant to the first sentence of
this Section 5(b).

                  (c) STOCK OPTIONS, RESTRICTED STOCK AND PERFORMANCE SHARES.
Upon the Termination Date, (i) all Stock Options granted to the Executive
pursuant to the 1992 Incentive Equity Plan, or any successor plan or similar
plan, shall be vested, (ii) the restrictions on any restricted stock awarded to
the Executive under the 1992 Incentive Equity Plan, or any successor plan or
similar plan, shall be released, and (iii) all Performance Share Awards under
the Long-Term Performance Share Program under the 1992 Incentive Equity Plan for
which the measurement period has not yet expired shall be earned assuming
management objectives have been met at the target level.

                  (d) METHOD OF PAYMENT. Upon written notice given by the
Executive to Cleveland-Cliffs prior to the occurrence of a Change of Control,
the Executive, at his sole option, without adjustment to reflect the present
value of such amounts as aforesaid, may elect to have all or any of the
Severance Payment described in Section 5(a) hereof paid to him on a quarterly or
monthly basis during the time remaining until the expiration of the third
anniversary of the Change of Control.

                  (e) OUTPLACEMENT COUNSELING. Cleveland-Cliffs shall reimburse
the Executive for reasonable expenses incurred for outplacement counseling (i)
which are pre-approved by the Chief Human Resources Officer of Cleveland-Cliffs,
(ii) which do not exceed 15% of the Executive's annual Base Pay, and (iii) which
are incurred by the Executive within six months following the Termination Date.

                  (f) SET-OFF AND COUNTERCLAIM. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation against any
payment to or benefit for the Executive provided for in this Agreement.



<PAGE>   52


                                                                              10

                  (g) INTEREST. Without limiting the rights of the Executive at
law or in equity, if Cleveland-Cliffs fails to make any payment required to be
made hereunder on a timely basis, Cleveland-Cliffs shall pay interest on the
amount thereof at an annualized rate of interest equal to the then-applicable
Discount Rate.

                  (h) CALCULATION. The calculation of all payments of
compensation and other benefits to be provided to Executive under this Agreement
(other than payments pursuant to Section 8 hereof) shall be made by Hewitt
Associates ("Hewitt"), or such other actuarial firm selected by
Cleveland-Cliffs' independent accountants and satisfactory to Executive.
Cleveland-Cliffs shall provide to such actuarial firm all information requested
by such actuarial firm as necessary for or helpful to it to make the
calculations hereunder.

                  6. SUPPLEMENTAL RETIREMENT PLAN. Cleveland-Cliffs hereby
waives the discretionary right, at any time subsequent to the date of a Change
of Control, to amend or terminate the SRP as to Executive as provided in
paragraph 8 thereof or to terminate the rights of Executive or his beneficiary
under the SRP in the event Executive engages in a competitive business as
provided in any plan or arrangement between Cleveland-Cliffs 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 Section 6 shall constitute a "Supplemental Agreement" as defined in
Paragraph 1.J of the SRP. If Cleveland-Cliffs shall terminate the Executive's
employment during the Period of Employment, other than for Cause pursuant to
Section 4(a) hereof, or if the Executive shall terminate his employment pursuant
to Section 4(b) hereof, or if, following the end of the Period of Employment,
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) The Executive shall be credited with years of continuous
service at the time of his termination of employment with Cleveland-Cliffs (by
death or otherwise) 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 Cleveland-Cliffs until the
expiration of the third anniversary of the Change of Control, and had he
attained the greater of (iii) his actual chronological age or (iv) his
chronological age at the expiration of the third anniversary of the Change of
Control. 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. The Executive shall be eligible to commence the 30-year
pension benefit on the earlier of (v) the date upon which the Executive would
have otherwise reached 30 years of continuous service with Cleveland-Cliffs but
for his termination of employment after the Change of Control, or (vi) the date
upon



<PAGE>   53


                                                                              11

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 (as defined in Section 1(d) hereof) is equal to 30 years; and

                   (b) The Executive shall be a "Participant" in the SRP,
notwithstanding any limitations therein.

A copy of the SRP is attached to this Agreement as Exhibit A. The SRP is
incorporated in all respects herein; provided, however, that the terms of this
Agreement shall take precedence to the extent they are contrary to provisions
contained in the SRP.

                   7. WELFARE BENEFIT CONTINUATION FOLLOWING TERMINATION AFTER
PERIOD OF EMPLOYMENT. Following the later of the end of the Period of
Employment, or Executive's termination of employment with Cleveland-Cliffs,
Cleveland-Cliffs shall:

                  (a) Provide medical, hospital, surgical and prescription drug
coverage, equivalent to that furnished on February 1, 1992 to officers who
retire after January 1, 1990 by Cleveland-Cliffs, to the Executive and his
spouse for their lifetimes, and to eligible dependents of the Executive for
their periods of eligibility, through insurance or otherwise;

                  (b) Provide life insurance on the Executive, equivalent to
that furnished on February 1, 1992 to officers who retire after January 1, 1990
by Cleveland-Cliffs, to the Executive for his lifetime; and

                  (c) Without otherwise limiting the purposes or effect of this
Section 7 hereof, welfare benefits payable to the Executive or his spouse or
dependents pursuant to this Section 7 shall be reduced to the extent comparable
welfare benefits are payable pursuant to Section 5(b) hereof or are actually
received by the Executive or his spouse or dependents from another employer.

                  8. CERTAIN ADDITIONAL PAYMENTS BY CLEVELAND-CLIFFS. (a)
Anything in this Agreement to the contrary notwithstanding, in the event that
this Agreement shall become operative and it shall be determined (as hereafter
provided) that any payment or distribution by Cleveland-Cliffs to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, 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 by reason of being considered
"contingent on a change in ownership or control" of the Corporation, 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



<PAGE>   54


                                                                              12

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 this Agreement, 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.

                  (b) 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 Cleveland-Cliffs to
the Executive and the amount of such Gross-Up Payment, if any, shall be made by
a nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both
Cleveland-Cliffs 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
Cleveland-Cliffs or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, Cleveland-Cliffs shall pay the required
Gross-Up Payment to the Executive within five 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 Cleveland-Cliffs 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 Cleveland-
Cliffs should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that Cleveland-Cliffs
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 Cleveland-Cliffs and the Executive as promptly
as possible. Any such Underpayment shall be promptly paid by Cleveland-Cliffs
to, or for the benefit of, the



<PAGE>   55


                                                                              13

Executive within five business days after receipt of such determination and
calculations.

                  (c) Cleveland-Cliffs and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of Cleveland-Cliffs 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 Cleveland-Cliffs and the Executive.

                  (d) 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 Cleveland-Cliffs, provide to
Cleveland-Cliffs 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 Cleveland-Cliffs,
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 five business days pay to Cleveland-Cliffs
the amount of such reduction.

                  (e) 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 Cleveland-Cliffs. If such fees
and expenses are initially paid by the Executive, Cleveland-Cliffs shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof.

                  (f) The Executive shall notify Cleveland-Cliffs in writing of
any claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by Cleveland-Cliffs 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 Cleveland-Cliffs 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 Cleveland-Cliffs and (ii) the date that
any payment of amount with respect to such claim is due. If Cleveland-Cliffs
notifies the Executive in



<PAGE>   56


                                                                              14

writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

                      (i)  provide Cleveland-Cliffs with any written
                  records or documents in his possession relating to such
                  claim reasonably requested by Cleveland-Cliffs;

                      (ii) take such action in connection with contesting such
                  claim as Cleveland-Cliffs 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 Cleveland- Cliffs;

                     (iii)  cooperate with Cleveland-Cliffs in good faith
                  in order effectively to contest such claim; and

                      (iv)  permit Cleveland-Cliffs to participate in any
                  proceedings relating to such claim;

         PROVIDED, HOWEVER, that Cleveland-Cliffs 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,
         Cleveland-Cliffs 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 Cleveland-Cliffs shall determine;
         PROVIDED, HOWEVER, that if Cleveland-Cliffs directs the Executive to
         pay the tax claimed and sue for a refund, Cleveland-Cliffs 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, Cleveland-Cliffs's control of any such contested



<PAGE>   57


                                                                              15

         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.

                  (g) If, after the receipt by the Executive of an amount
advanced by Cleveland-Cliffs pursuant to Subsection (f) of this Section, the
Executive receives any refund with respect to such claim, the Executive shall
(subject to Cleveland-Cliffs's complying with the requirements of Subsection (f)
of this Section) promptly pay to Cleveland-Cliffs 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
Cleveland-Cliffs pursuant to Subsection (f) of this Section, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and Cleveland-Cliffs 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
Cleveland-Cliffs to the Executive pursuant to this Section.

                  9. NO MITIGATION OBLIGATION: Cleveland-Cliffs hereby
acknowledges that it will be difficult, and may be impossible, for the Executive
to find reasonably comparable employment following the Termination Date and that
the non-competition covenant contained in Section 11 hereof will further limit
the employment opportunities for the Executive. Accordingly, the parties hereto
expressly agree that except as expressly provided in Sections 5(b) and 7 hereof,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.

                  10. CONFIDENTIALITY: The Executive acknowledges that all trade
secrets, customer lists, and other confidential business information are the
exclusive property of Cleveland-Cliffs, and the Executive shall not at any time
during the Term of this Agreement or at any time thereafter, directly or
indirectly reveal or cause to be revealed to any person or entity the trade
secrets, customer lists and other confidential business information obtained as
a result of the Executive's employment or relationship with Cleveland-Cliffs.

                   11. COMPETITIVE ACTIVITY: For a period of twenty-four (24)
months from and after any termination of employment following the occurrence of
a Change of Control, the Executive shall not become an officer, director, joint
venturer, employee, consultant, 5-percent or more shareholder (directly or
indirectly), or promote or assist (financially or otherwise) any entity which
competes in



<PAGE>   58


                                                                              16

any business in which Cleveland-Cliffs or any of its affiliates are engaged as
of the date-of the Change of Control. For this purpose, business is defined as
the iron and steel industry. The provisions of this Section 11 shall, following
a Change of Control, supersede and be in lieu of any similar provision in any
other plan or agreement involving Cleveland-Cliffs and the Executive, whether
now existing or hereinafter adopted or entered into, including, but not limited
to, the SRP.

                  12. RELEASE: Payment of the Severance Compensation set forth
in Section 5 hereof is conditioned upon the Executive executing and delivering a
release (the "Release") satisfactory to Cleveland-Cliffs releasing
Cleveland-Cliffs, its directors, employees and affiliates from any and all
claims, demands, damages, actions and/or causes of action whatsoever, which the
Executive may have had on account of the termination of his employment,
including, but not limited to claims of discrimination, including on the basis
of sex, race, age, national origin, religion, or handicapped status (with all
applicable periods during which the Executive may revoke the Release or any
provision thereof having expired), and any and all claims, demands and causes of
action for retirement (other than under any "pension benefit plan" or under any
"welfare benefit plan" of Cleveland-Cliffs (as the terms "pension benefit plan"
and "welfare benefit plan" are defined in Section 3 of ERISA) other than the
SRP), severance or other termination pay, and because pursuant to Section 5(a)
the Executive is entitled to lump sum payments of Incentive Pay and benefits
under the SRP, under the SRP and any incentive compensation plans and
arrangements of Cleveland-Cliffs described in Section 3(b). Such Release shall
not, however, apply to the obligations of Cleveland-Cliffs arising under this
Agreement, or rights of indemnification the Executive may have under the
Regulations of Cleveland-Cliffs or by contract or by statute.

                  13. LEGAL FEES AND EXPENSES: (a) It is the intent of
Cleveland-Cliffs that the Executive not be required to incur any expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Executive hereunder.
Accordingly, if it should appear to the Executive that Cleveland-Cliffs has
failed to comply with any of its obligations under this Agreement or in the
event that Cleveland-Cliffs or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Executive the benefits intended to be provided to the
Executive hereunder, Cleveland-Cliffs irrevocably authorizes the Executive from
time to time to retain counsel of his choice, at the expense of Cleveland-Cliffs
as hereafter provided, to represent the Executive in connection with the
initiation or defense of any such litigation or other legal action, whether by
or against Cleveland-Cliffs or any Director, officer, stockholder or other
person affiliated with Cleveland-Cliffs, in any jurisdiction. Notwithstanding
any existing or prior attorney-




<PAGE>   59
                                                                              17


client relationship between Cleveland-Cliffs and such counsel, Cleveland-Cliffs
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection Cleveland-Cliffs and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. Cleveland-Cliffs shall promptly pay or cause to be
paid and shall be solely responsible for any and all attorneys' and related fees
and expenses incurred by the Executive as a result of Cleveland-Cliffs' failure
to perform this Agreement or any provision hereof or as a result of
Cleveland-Cliffs or any person contesting the validity or enforceability of this
Agreement or any provision hereof as aforesaid.

                  (b) To ensure that the provisions of this Agreement can be
enforced by Executive, certain trust arrangements ("Trusts") have been
established between KeyTrust Company of Ohio, N.A., as Trustee ("Trustee"), and
Cleveland-Cliffs. Trust Agreement No. 1 (Amended and Restated Effective June 1,
1997) ("Trust Agreement No. 1") dated June 12, 1997, and Trust Agreement No. 2
(Amended and Restated Effective June 1, 1997) ("Trust Agreement No. 2") dated
June 12, 1997, as amended and/or restated, between the Trustee and
Cleveland-Cliffs, are attached as Exhibits B and C, respectively. A Trust
Agreement No. 7 ("Trust Agreement No. 7") dated April 9, 1991, as amended,
between the Trustee and Cleveland-Cliffs, is attached as Exhibit D. Each such
Trust Agreement shall be considered a part of this Agreement and shall set forth
the terms and conditions relating to payment under Trust Agreement No. 1 of
compensation and other benefits pursuant to Sections 3, 5 and 8 and pension
benefits pursuant to Sections 3, 5 and 6 owed by Cleveland-Cliffs, payment from
Trust Agreement No. 7 of certain pension benefits pursuant to Sections 3, 5 and
6 owed by Cleveland-Cliffs, and payment from Trust Agreement No. 2 for
attorneys' fees and related fees and expenses pursuant to Section 13(a) hereof
owed by Cleveland-Cliffs. Executive shall make demand on Cleveland-Cliffs for
any payments due Executive pursuant to Section 13(a) hereof prior to making
demand therefor on the Trustee under Trust Agreement No. 2.

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

                  (A) 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 of Control (or on such fifth business day if
         the Board has declared a Change of Control to be imminent) of the
         payments to be made to Executive under the provisions of Sections 3, 5,
         6 and 8 hereof, such present value to be computed using the assumptions
         set forth in Section 5(a) hereof and the computations provided for in
         Section 8 hereof less (II) the balance in the Executive's account
         provided for in Section 7(b) of Trust Agreement No. 1 as of the most
         recent



<PAGE>   60


                                                                              18

         completed valuation thereof, less (III) the balance in the Executive's
         account provided for in Section 7(b) of Trust Agreement No. 7 as of the
         most recent completed valuation thereof, as certified by the Trustee
         under each of Trust Agreement No. 1 and Trust Agreement No. 7;
         provided, however, that if the Trustee under Trust Agreement No. 1
         and/or Trust Agreement No. 7, respectively, does not so certify by the
         end of the fourth (4th) business day after the earlier of such Change
         of Control or declaration, then the balance of such respective account
         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
         Cleveland-Cliffs' obligation to pay compensation, pension and other
         benefits hereunder, it being the intent of Cleveland-Cliffs that assets
         in such Trusts be held as security for Cleveland-Cliffs' obligation to
         pay compensation, pension and other benefits under this Agreement; and

                  (B) 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 Executive's attorneys' and related
         fees and expenses by the Trustee pursuant to Trust Agreement No. 2
         shall, to the extent thereof, discharge Cleveland-Cliffs' obligation
         hereunder, it being the intent of Cleveland-Cliffs that assets in such
         Trust be held as security for Cleveland-Cliffs' obligation under
         Section 13(a) hereof. Executive understands and acknowledges that the
         entire corpus of the Trust under Trust Agreement No. 2 will be $250,000
         and that said amount will be available to discharge not only the
         obligations of the Cleveland-Cliffs to Executive under Section 13(a)
         hereof, but also similar obligations of the Cleveland-Cliffs to other
         executives and employees under similar provisions of other agreements
         and plans.

                  14. EMPLOYMENT RIGHTS: Nothing expressed or implied in this
Agreement shall create any right or duty on the part of Cleveland-Cliffs or the
Executive to have the Executive remain in the employment of Cleveland-Cliffs at
any time prior to a Change of Control; provided, however, that any termination
of employment of the Executive or the removal of the Executive from the office
or position in Cleveland-Cliffs following the commencement of any discussion
with a third person that ultimately results in a Change of Control shall be
deemed to be a termination or removal of the Executive after a Change of Control
for purposes of this Agreement. Executive expressly acknowledges that he is an
employee at will, and that Cleveland-Cliffs may terminate him at any time during
the Period of Employment for any reason if Cleveland-Cliffs pays the Severance
Compensation provided for under Section 5 of this Agreement, and otherwise
comply with its other continuing covenants in this Agreement, including without
limitation, Sections 3 and 6.



<PAGE>   61


                                                                              19

                   15. WITHHOLDING OF TAXES: Cleveland-Cliffs may withhold from
any amounts payable under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or government regulation or ruling.

                   16. SUCCESSORS AND BINDING AGREEMENT: (a) Cleveland-Cliffs
shall require any successor (including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of
Cleveland-Cliffs whether by purchase, merger, consolidation, reorganization or
otherwise, and such successor shall thereafter be deemed "Cleveland-Cliffs" for
the purposes of this Agreement), by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent Cleveland-Cliffs would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of Cleveland-Cliffs and any successor
to Cleveland-Cliffs but shall not otherwise be assignable, transferable or
delegable by Cleveland-Cliffs.

                  (b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.

                  (c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 16. Without limiting the generality of the
foregoing, the 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 will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 16, Cleveland-Cliffs shall have no liability
to pay any amount so attempted to be assigned, transferred or delegated.

                  (d) The agreement of Cleveland-Cliffs to make payments and/or
provide benefits hereunder shall represent an unsecured obligation of
Cleveland-Cliffs.

                  (e) Cleveland-Cliffs and the Executive recognize that each
party will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach,
Cleveland-Cliffs and the Executive hereby agree and consent that the other shall
be entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.

                   17. NOTICE: For all purposes of this Agreement, all
communications including without limitation notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been mailed by
United States registered



<PAGE>   62


                                                                              20

or certified mail, return receipt requested, postage prepaid, addressed to such
party's address as specified below, or at such other address as such party shall
specify by notice to the other.
If to Cleveland-Cliffs, to:

                           Cleveland-Cliffs Inc
                           1100 Superior Avenue
                           Cleveland, Ohio  44114-2589
                           Attention:  Secretary

If to the Executive, to the last address shown on the records of
Cleveland-Cliffs. Notices of change of address shall be effective only upon
receipt.

                   18. GOVERNING LAW: The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws of such State.

                   19. VALIDITY: If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement 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.

                   20. AMENDMENT: This Agreement may be amended only by a
written instrument signed by the parties hereto, which makes specific reference
to this Agreement.

                   21. RIGHTS UNDER OTHER PLANS AND PROGRAMS: Anything in this
Agreement to the contrary notwithstanding, no provision of this Agreement is
intended, nor shall it be construed, to reduce or in any way restrict any
benefit to which Executive may be entitled under any other agreement, plan or
program providing benefits for Executive, including but not limited to the plans
described in Sections 3 and 5 of this Agreement.

                  22. MISCELLANEOUS: No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and Cleveland-Cliffs. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

                   23. COUNTERPARTS: This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an



<PAGE>   63


                                                                             21

original but all of which together will constitute one and the
same agreement.

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

                   IN WITNESS WHEREOF, Cleveland-Cliffs has caused this
Agreement to be executed on its behalf by its duly authorized representative and
Executive has hereunto set his hand, all as of the date and year first above
written.

                                             CLEVELAND-CLIFFS INC

                                             By  /s/ John C. Morley
                                               -------------------------------
                                               Chairman, Compensation and
                                                Organization Committee

                                             /s/ M. Thomas Moore
                                             ---------------------------------
                                             M. Thomas Moore


<PAGE>   64


                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT
                              --------------------

                  This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
dated as of June 30, 1997, by and between Cleveland-Cliffs Inc, an Ohio
corporation ("Cleveland-Cliffs"), and William R. Calfee, Social Security Number
___ , who is presently Executive Vice President - Commercial of Cleveland-
Cliffs (the "Executive"), amends and restates the Employment Agreement, dated 
as of February 1, 1992, between Cleveland-Cliffs and the Executive;

                                   WITNESSETH:

                  WHEREAS, the Executive is a senior executive of
Cleveland-Cliffs and has made and is expected to continue to make major
contributions to the profitability, growth and financial strength of
Cleveland-Cliffs;

                  WHEREAS, Cleveland-Cliffs recognizes that, as is the case for
most publicly held companies, the possibility of a Change of Control (as that
term is hereafter defined) exists;

                  WHEREAS, Cleveland-Cliffs desires to assure itself of both
present and future continuity of management in the event of a Change of Control
and desires to establish certain minimum compensation rights of its senior
executives, including the Executive, applicable in the event of a Change of
Control;

                  WHEREAS, Cleveland-Cliffs wishes to ensure that its senior
executives are not practically disabled from discharging their duties upon a
Change of Control; and

                  WHEREAS, this Agreement is not intended to alter materially
the compensation and benefits which the Executive could reasonably expect to
receive from Cleveland-Cliffs absent a Change of Control and, accordingly,
although effective and binding as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change of Control;

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration including the Release provided for in Section 12
hereof, the receipt of which is hereby acknowledged, Cleveland-Cliffs and the
Executive agree as follows:

                   1. OPERATION OF AGREEMENT; CERTAIN DEFINITIONS:
                   (a) This Agreement is a continuation of the employment
agreement originally effective as of February 1, 1992 (the "Effective Date"),
but, anything in this Agreement to the contrary notwithstanding, this Agreement
shall not become operative unless 



<PAGE>   65
                                                                               2

and until there shall have occurred a Change of Control. For purposes of this
Agreement, a "Change of Control" shall have occurred if at any time during the
Term (as that term is hereafter defined) any of the following events shall
occur:

                  (i) Cleveland-Cliffs shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of Cleveland-Cliffs as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) A person, within the meaning of Section 3(a)(9) or of
         Section 13(d) (3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of Cleveland-Cliffs (whether directly or indirectly);
         or

                  (iv) During any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of Cleveland-Cliffs cease, for any reason, to constitute at
         least a majority thereof, unless the election, or the nomination for
         election by the shareholders of Cleveland-Cliffs, of each Director
         first elected during any such period was approved by a vote of at least
         one-third of the Directors of Cleveland-Cliffs who are Directors of
         Cleveland-Cliffs on the date of the beginning of any such period.

                  (b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.

                  (c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the Effective Date hereof and shall expire as
of the later of (i) the close of business on the eighth anniversary of the
Effective Date and (ii) the expiration of the Period of Employment (as that term
is hereafter defined); provided, however, that (A) this Agreement may be
continued in full force and effect for an additional period or periods of one
(1) year if Cleveland-Cliffs and the Executive mutually agree to such extension 
or extensions, (B) this Agreement


<PAGE>   66
                                                                               3

shall automatically renew for an additional period or periods of one (1) year if
the end of the Term occurs during the period of any discussions with any party
that might ultimately result in the occurrence of a Change of Control, and (C)
subject to Section 14 hereof, if, prior to a Change of Control, the Executive
ceases for any reason to be an officer of Cleveland-Cliffs, thereupon the Term
shall be deemed to have expired and this Agreement shall immediately terminate
and be of no further effect.

                  2. EMPLOYMENT; PERIOD OF EMPLOYMENT: (a) Subject to the terms
and conditions of this Agreement, upon the occurrence of a Change of Control,
Cleveland-Cliffs shall continue the Executive in its employ and the Executive
shall remain in the employ of Cleveland-Cliffs for the period set forth in
Section 2(b) hereof (the "Period of Employment"), in the position and with
substantially the same duties and responsibilities that he had immediately prior
to the Change of Control, or to which Cleveland-Cliffs and the Executive may
hereafter mutually agree in writing. Throughout the Period of Employment, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of Cleveland-Cliffs as in effect for senior executives immediately
prior to the Change of Control) to the business and affairs of Cleveland-Cliffs,
but nothing in this Agreement shall preclude the Executive from devoting
reasonable periods of time during normal business hours to (i) serving as a
director, trustee or member of or participant in any organization or business so
long as such activity would not constitute Competitive Activity (as described in
Section 11 hereof), (ii) engaging in charitable and community activities, or
(iii) managing his personal investments. The business, assets, and properties of
Cleveland-Cliffs, as well as the support services and facilities available to
the Executive, shall not differ materially from those of Cleveland-Cliffs
immediately prior to the date of the Change of Control.

                  (b) The Period of Employment shall commence on the date of the
occurrence of a Change of Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the expiration of the third
anniversary of the occurrence of the Change of Control, or (ii) the Executive's
death.

                   3. COMPENSATION DURING PERIOD OF EMPLOYMENT: During the
Period of Employment the Executive shall receive and be entitled to the
following:

                   (a) an annual base salary at a rate not less than the
Executive's annual fixed or base compensation (payable monthly or otherwise as
in effect for senior executives of Cleveland-Cliffs immediately prior to the
occurrence of a Change of Control) or such higher rate as may be determined from
time to time by the Board of Directors of Cleveland-Cliffs (the "Board") or the
Organization and Compensation Committee thereof (the Committee") (which base
salary at such rate is herein referred to as "Base 


<PAGE>   67
                                                                               4

Pay"), reduced by any disability benefits which the Executive receives under any
Cleveland-Cliffs disability program;

                  (b) participation, consistent with past practices, in
incentive compensation plans and arrangements of Cleveland-Cliffs in effect as
of the date of the Change of Control, as the same may subsequently be modified,
supplemented or replaced, including, without limitation, the Incentive Bonus
Plan and the 1992 Incentive Equity Plan (including the Long-Term Performance
Share Program), without material reduction in the reward opportunities available
to the Executive, and without reduction in the target bonus and target award
percentages applicable to the Executive immediately prior to the occurrence of a
Change of Control (with annual amounts and opportunities awarded pursuant to
such plans, programs and arrangements collectively referred to as "Incentive
Pay");

                  (c) participation in the Cleveland-Cliffs Inc Supplemental
Retirement Benefit Plan (As Amended and Restated as of January 1, 1997)
("Supplemental Retirement Plan" or "SRP"), as the same hereafter may be amended
prior to a Change of Control, and modified as provided in Section 6 hereof; and

                  (d) participation, consistent with past practices, in all
other employee benefit plans and practices of Cleveland-Cliffs in effect as of
the date of the Change of Control (including, without limitation, medical,
dental, hospitalization, health and welfare plans, life, long-term disability
and accident insurance programs, employee savings and investment plans, stock
ownership plans and retirement plans and supplemental arrangements), as the same
may be modified, supplemented or replaced without material reduction in total
value of the benefits to Executive (collectively, "Employee Benefits").

                   4. TERMINATION FOLLOWING A CHANGE OF CONTROL: (a) In the
event of the occurrence of a Change of Control, the Executive's employment may
be terminated by Cleveland-Cliffs during the Period of Employment and the
Executive shall be entitled to the benefits provided by Section 5 unless such
termination is the result of the occurrence of one or more of the following
events:

               (i)   The Executive's death; or

              (ii)   The Executive's employment is terminated for
                     Cause.

For purposes of this Agreement, "Cause" shall mean that, prior to any
termination pursuant to Section 4(b), the Executive shall have committed any act
that is materially inimical to the best interests of Cleveland-Cliffs and that
constitutes common law fraud, a felony, or other gross malfeasance of duty. 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 


<PAGE>   68
                                                                               5

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 his counsel, to be
heard before the Board), finding that, in the good faith opinion of the Board,
the Executive committed an act set forth in this Section 4(a) and specifying the
particulars thereof in detail. Nothing herein shall limit the right of the
Executive or his beneficiaries to contest the validity or propriety of any such
determination.

                  (b) During the Period of Employment the Executive shall be
entitled to the benefits as provided in Section 5 hereof upon the occurrence of
one or more of the following events:

                  (i) The Executive's "Disability", shall be deemed to have
         occurred six (6) months after the Executive shall have become totally
         and permanently disabled by bodily or mental injury or disease so as to
         be prevented thereby from engaging in any executive employment or
         occupation for remuneration or profit, as determined and certified to
         Cleveland-Cliffs and the Executive by The Cleveland Clinic (or if it is
         unwilling or unable to act, by one or more physicians designated for
         such purpose by the Cleveland Academy of Medicine or its successor
         organization); or

                  (ii)  Termination by the Executive of his employment
         with Cleveland-Cliffs upon the occurrence of any of the
         following events:

                           (A) The failure to elect, reelect or otherwise to
                  maintain the Executive in the office or position, or a
                  substantially equivalent office or position, of or with
                  Cleveland-Cliffs which the Executive held immediately prior to
                  a Change of Control, or the removal of, or failure to reelect,
                  the Executive as a Director of Cleveland-Cliffs (or any
                  successor thereto), if the Executive shall have been a
                  Director of Cleveland-Cliffs immediately prior to the Change
                  of Control;

                           (B) (I) A significant adverse change in the nature or
                  scope of the authorities, powers, functions, responsibilities
                  or duties attached to the position with Cleveland-Cliffs which
                  the Executive held immediately prior to the Change of Control,
                  (II) a reduction in the aggregate of the Executive's Base Pay
                  and Incentive Pay received from Cleveland-Cliffs, or a
                  reduction in the Executive's opportunities for Incentive Pay
                  (including, but not limited to, a reduction in target bonus
                  percentage or target award opportunity (whether measured by
                  number of performance shares or management objectives))
                  provided by Cleveland-Cliffs, or (III) a reduction or
                  termination of any benefits described in Section 3(c) or (d)
                  hereof to which the Executive was entitled immediately prior
                  to the Change of Control, any of which is not remedied by 
                  Cleveland-Cliffs within 10 



<PAGE>   69
                                                                               6

                  calendar days after receipt by Cleveland-Cliffs of written
                  notice from the Executive of such change, reduction or
                  termination, as the case may be;

                           (C) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by Cleveland-Cliffs by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change of Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change of Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  the Executive's performance of, or has caused the Executive to
                  suffer a substantial reduction in, any of the authorities,
                  powers, functions, responsibilities or duties attached to the
                  position held by the Executive immediately prior to the Change
                  of Control, which situation is not remedied by
                  Cleveland-Cliffs within ten calendar days after written notice
                  to Cleveland-Cliffs from the Executive of such determination;

                           (D) The liquidation, dissolution, merger,
                  consolidation or reorganization of Cleveland-Cliffs or the
                  transfer of all or a significant portion of its business
                  and/or assets, unless the successor or successors (by
                  liquidation, merger, consolidation, reorganization or
                  otherwise) to which all or a significant portion of its
                  business and/or assets have been transferred (directly or by
                  operation of law) shall have assumed all duties and
                  obligations of Cleveland-Cliffs under this Agreement pursuant
                  to Section 16 hereof;

                           (E) The relocation of Cleveland-Cliffs' principal
                  executive offices, or a requirement that the Executive change
                  his principal location of work to any location which is in
                  excess of 25 miles from the location thereof immediately prior
                  to the Change of Control, or a requirement that the Executive
                  travel away from his office in the course of discharging his
                  responsibilities or duties hereunder at least 20% more (in
                  terms of aggregate days in any calendar year or in any
                  calendar quarter when annualized for purposes of comparison to
                  any prior year) than was required of him prior to the Change
                  of Control without, in any case described above, the prior
                  written consent of the Executive; or

                           (F)  Without limiting the generality or effect of
                  the foregoing, any material breach of this Agreement by
                  Cleveland-Cliffs or any successor thereto.



<PAGE>   70
                                                                               7

                   (c) A termination by Cleveland-Cliffs pursuant to Section
4(a) hereof other than for Cause or by the Executive pursuant to Section 4(b)
hereof shall not affect any rights which the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of Cleveland-Cliffs, which
rights shall be governed by the terms thereof, subject, however, to the
modifications in Section 6 hereof. If this Agreement or the employment of the
Executive is terminated under circumstances in which the Executive is not
entitled to any payments under Sections 3 or 5 hereof, the Executive shall have
no further obligation or liability to Cleveland-Cliffs hereunder with respect to
his prior or any future employment by Cleveland-Cliffs.

                  5. SEVERANCE COMPENSATION: If Cleveland-Cliffs shall terminate
the Executive's employment during the Period of Employment, other than pursuant
to Cause under Section 4(a) hereof, or if the Executive shall terminate his
employment pursuant to Section 4(b) hereof, then in lieu of any further payments
to the Executive for periods subsequent to the date of the Executive's
termination of employment (the "Termination Date"), the date of which shall be
the date of termination or such other date that may be specified by the
Executive if the termination is pursuant to Section 4(b) hereof,
Cleveland-Cliffs shall provide Severance Compensation to the Executive as
described below:

                   (a) SEVERANCE PAY. Within five business days after the
Termination Date:

                  (i) Cleveland-Cliffs shall pay to the Executive a lump sum
         payment (the "Severance Payment") in an amount equal to the present
         value (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
         such rate is so prescribed, a rate equal to the then "applicable
         interest rate" under Section 417(e)(3)(A)(ii)(II) of the Code for the
         month in which the Termination Date occurs (the "Discount Rate")) of

                           (A) the amount of Base Pay that would have been paid
                  to the Executive pursuant to Section 3(a) for the greater of
                  (I) one year or (II) the duration of the Period of Employment,
                  in each case if the termination had not taken place (at the
                  rate in effect immediately prior to the Change of Control or
                  prior to the Termination Date, whichever is higher) and, if
                  the Termination is on account of the Executive's Disability,
                  reduced by the amount of disability benefits that would have
                  been paid to the Executive for the duration of the Period of
                  Employment if the termination had not taken place; plus

                           (B)  the amount of Average Incentive Pay (as that
                  term is hereinafter defined) that would have been paid 



<PAGE>   71
                                                                               8

                  to the Executive pursuant to Section 3(b) for the greater of
                  (I) one year or (II) the duration of the Period of Employment
                  if the termination had not taken place.

                  For purposes of this Agreement, Average Incentive Pay for any
                  12 month period shall mean an amount which is the greater of
                  (III) the average amount of Incentive Pay (as defined in
                  Section 3(b) hereof) awarded to the Executive for the three
                  calendar years immediately prior to the Termination Date, or
                  (IV) the amount of the most recent award of Incentive Pay.

                  (ii) Cleveland-Cliffs shall pay to the Executive 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 at or after the
         end of the Period of Employment under the SRP, as the same may be
         further amended prior to a Change of Control and as modified by Section
         6 hereof (assuming Base Salary at the rate in effect immediately prior
         to the occurrence of Change of Control and Incentive Pay equivalent to
         the amount of Average Incentive Pay), if the Executive had remained in
         the full-time employment of Cleveland-Cliffs until the end of the
         Period of Employment.

         The calculation of the SRP Payment and its actuarial equivalence shall
         be made as of the date the Executive is terminated. The lump sum of
         actuarial equivalence shall be calculated as of the end of the Period
         of Employment using the assumptions and factors used in the SRP, and
         such sums shall be discounted to the date of payment using the Discount
         Rate.

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

                  (b) EMPLOYEE BENEFITS. For the greater of (i) one year or (ii)
the duration of the Period of Employment, Cleveland-Cliffs shall arrange to
provide the Executive with Employee Benefits substantially similar to those
which the Executive was receiving or entitled to receive immediately prior to
the Termination Date as described in Section 3(d) (and if and to the extent that
such benefits shall not or cannot be paid or provided under any policy, plan,
program or arrangement of Cleveland-Cliffs solely due to the fact that the
Executive is no longer an officer or employee of Cleveland-Cliffs, then
Cleveland-Cliffs shall itself pay or provide for the payment to the Executive,
his dependents and beneficiaries, such Employee Benefits). Without otherwise
limiting the purposes or effect of this Section 5(b), Employee Benefits payable
to the Executive pursuant to this Section 5(b) by reason of any "welfare benefit
plan" of Cleveland-Cliffs (as the term "welfare benefit plan" is defined in 
Section 3(1) of the 


<PAGE>   72
                                                                               9

                                                                            
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) shall be
reduced to the extent comparable welfare benefits are actually received by the
Executive from another employer during the period beginning upon the occurrence
of the Termination Date and ending upon the last day during which
Cleveland-Cliffs is required to provide such Employee Benefits pursuant to the
first sentence of this Section 5(b).

                  (c) STOCK OPTIONS, RESTRICTED STOCK AND PERFORMANCE SHARES.
Upon the Termination Date, (i) all Stock Options granted to the Executive
pursuant to the 1992 Incentive Equity Plan, or any successor plan or similar
plan, shall be vested, (ii) the restrictions on any restricted stock awarded to
the Executive under the 1992 Incentive Equity Plan, or any successor plan or
similar plan, shall be released, and (iii) all Performance Share Awards under
the Long-Term Performance Share Program under the 1992 Incentive Equity Plan for
which the measurement period has not yet expired shall be earned assuming
management objectives have been met at the target level.

                  (d) METHOD OF PAYMENT. Upon written notice given by the
Executive to Cleveland-Cliffs prior to the occurrence of a Change of Control,
the Executive, at his sole option, without adjustment to reflect the present
value of such amounts as aforesaid, may elect to have all or any of the
Severance Payment described in Section 5(a) hereof paid to him on a quarterly or
monthly basis during the time remaining until the expiration of the third
anniversary of the Change of Control.

                  (e) OUTPLACEMENT COUNSELING. Cleveland-Cliffs shall reimburse
the Executive for reasonable expenses incurred for outplacement counseling (i)
which are pre-approved by the Chief Human Resources Officer of Cleveland-Cliffs,
(ii) which do not exceed 15% of the Executive's annual Base Pay, and (iii) which
are incurred by the Executive within six months following the Termination Date.

                  (f) SET-OFF AND COUNTERCLAIM. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation against any
payment to or benefit for the Executive provided for in this Agreement.

                  (g) INTEREST. Without limiting the rights of the Executive at
law or in equity, if Cleveland-Cliffs fails to make any payment required to be
made hereunder on a timely basis, Cleveland-Cliffs shall pay interest on the
amount thereof at an annualized rate of interest equal to the then-applicable
Discount Rate.

                  (h) CALCULATION. The calculation of all payments of
compensation and other benefits to be provided to Executive under this Agreement
(other than payments pursuant to Section 8 hereof) shall be made by Hewitt
Associates ("Hewitt"), or such other actuarial firm selected by
Cleveland-Cliffs' independent accountants and satisfactory to Executive. 
Cleveland-Cliffs shall 


<PAGE>   73
                                                                              10

provide to such actuarial firm all information requested by such actuarial firm
as necessary for or helpful to it to make the calculations hereunder.

                  6. SUPPLEMENTAL RETIREMENT PLAN. Cleveland-Cliffs hereby
waives the discretionary right, at any time subsequent to the date of a Change
of Control, to amend or terminate the SRP as to Executive as provided in
paragraph 8 thereof or to terminate the rights of Executive or his beneficiary
under the SRP in the event Executive engages in a competitive business as
provided in any plan or arrangement between Cleveland-Cliffs 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 Section 6 shall constitute a "Supplemental Agreement" as defined in
Paragraph 1.J of the SRP. If Cleveland-Cliffs shall terminate the Executive's
employment during the Period of Employment, other than for Cause pursuant to
Section 4(a) hereof, or if the Executive shall terminate his employment pursuant
to Section 4(b) hereof, or if, following the end of the Period of Employment,
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) The Executive shall be credited with years of continuous
service at the time of his termination of employment with Cleveland-Cliffs (by
death or otherwise) 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 Cleveland-Cliffs until the
expiration of the third anniversary of the Change of Control, and had he
attained the greater of (iii) his actual chronological age or (iv) his
chronological age at the expiration of the third anniversary of the Change of
Control. 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. The Executive shall be eligible to commence the 30-year
pension benefit on the date upon which the Executive would have otherwise
reached 30 years of continuous service with Cleveland-Cliffs but for his
termination of employment after the Change of Control; and

                   (b) The Executive shall be a "Participant" in the SRP,
notwithstanding any limitations therein.

A copy of the SRP is attached to this Agreement as Exhibit A. The SRP is
incorporated in all respects herein; provided, however, that the terms of this
Agreement shall take precedence to the extent they are contrary to provisions
contained in the SRP.

                   7. WELFARE BENEFIT CONTINUATION FOLLOWING TERMINATION AFTER
PERIOD OF EMPLOYMENT. Following the later of the end of the Period of
Employment, or Executive's termination of employment with Cleveland-Cliffs,
Cleveland-Cliffs shall: 


<PAGE>   74
                                                                              11

                   (a) Provide medical, hospital, surgical and prescription drug
coverage, equivalent to that furnished on February 1, 1992 to officers who
retire after January 1, 1990 by Cleveland-Cliffs, to the Executive and his
spouse for their lifetimes, and to eligible dependents of the Executive for
their periods of eligibility, through insurance or otherwise;

                  (b) Provide life insurance on the Executive, equivalent to
that furnished on February 1, 1992 to officers who retire after January 1, 1990
by Cleveland-Cliffs, to the Executive for his lifetime; and

                  (c) Without otherwise limiting the purposes or effect of this
Section 7 hereof, welfare benefits payable to the Executive or his spouse or
dependents pursuant to this Section 7 shall be reduced to the extent comparable
welfare benefits are payable pursuant to Section 5(b) hereof or are actually
received by the Executive or his spouse or dependents from another employer.

                  8. CERTAIN ADDITIONAL PAYMENTS BY CLEVELAND-CLIFFS. (a)
Anything in this Agreement to the contrary notwithstanding, in the event that
this Agreement shall become operative and it shall be determined (as hereafter
provided) that any payment or distribution by Cleveland-Cliffs to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, 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 by reason of being considered
"contingent on a change in ownership or control" of the Corporation, 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 this Agreement, 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.


<PAGE>   75
                                                                              12

                  (b) 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 Cleveland-Cliffs to
the Executive and the amount of such Gross-Up Payment, if any, shall be made by
a nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both
Cleveland-Cliffs 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
Cleveland-Cliffs or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, Cleveland-Cliffs shall pay the required
Gross-Up Payment to the Executive within five 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 Cleveland-Cliffs 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 Cleveland-
Cliffs should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that Cleveland-Cliffs
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 Cleveland-Cliffs and the Executive as promptly
as possible. Any such Underpayment shall be promptly paid by Cleveland-Cliffs
to, or for the benefit of, the Executive within five business days after receipt
of such determination and calculations.

                  (c) Cleveland-Cliffs and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of Cleveland-Cliffs 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 Cleveland- Cliffs and the Executive.

                   (d) 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 


<PAGE>   76
                                                                              13

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
Cleveland-Cliffs, provide to Cleveland-Cliffs 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 Cleveland-Cliffs, 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 five business
days pay to Cleveland-Cliffs the amount of such reduction.

                  (e) 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 Cleveland-Cliffs. If such fees
and expenses are initially paid by the Executive, Cleveland-Cliffs shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof.

                  (f) The Executive shall notify Cleveland-Cliffs in writing of
any claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by Cleveland-Cliffs 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 Cleveland-Cliffs 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 Cleveland-Cliffs and (ii) the date that
any payment of amount with respect to such claim is due. If Cleveland-Cliffs
notifies the Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:

                           (i)  provide Cleveland-Cliffs with any written
                  records or documents in his possession relating to such
                  claim reasonably requested by Cleveland-Cliffs;

                      (ii) take such action in connection with contesting such
                  claim as Cleveland-Cliffs 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 Cleveland- Cliffs;

                     (iii)  cooperate with Cleveland-Cliffs in good faith
                  in order effectively to contest such claim; and


<PAGE>   77
                                                                              14

                      (iv)  permit Cleveland-Cliffs to participate in any
                  proceedings relating to such claim;

         PROVIDED, HOWEVER, that Cleveland-Cliffs 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,
         Cleveland-Cliffs 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 Cleveland-Cliffs shall determine;
         PROVIDED, HOWEVER, that if Cleveland-Cliffs directs the Executive to
         pay the tax claimed and sue for a refund, Cleveland-Cliffs 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, Cleveland-Cliffs'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.

                  (g) If, after the receipt by the Executive of an amount
advanced by Cleveland-Cliffs pursuant to Subsection (f) of this Section, the
Executive receives any refund with respect to such claim, the Executive shall
(subject to Cleveland-Cliffs's complying with the requirements of Subsection (f)
of this Section) promptly pay to Cleveland-Cliffs 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
Cleveland-Cliffs pursuant to Subsection (f) of this Section, a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and Cleveland-Cliffs does not notify the Executive in writing of its 


<PAGE>   78
                                                                              15

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
Cleveland-Cliffs to the Executive pursuant to this Section.

                  9. NO MITIGATION OBLIGATION: Cleveland-Cliffs hereby
acknowledges that it will be difficult, and may be impossible, for the Executive
to find reasonably comparable employment following the Termination Date and that
the non-competition covenant contained in Section 11 hereof will further limit
the employment opportunities for the Executive. Accordingly, the parties hereto
expressly agree that except as expressly provided in Sections 5(b) and 7 hereof,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.

                  10. CONFIDENTIALITY: The Executive acknowledges that all trade
secrets, customer lists, and other confidential business information are the
exclusive property of Cleveland-Cliffs, and the Executive shall not at any time
during the Term of this Agreement or at any time thereafter, directly or
indirectly reveal or cause to be revealed to any person or entity the trade
secrets, customer lists and other confidential business information obtained as
a result of the Executive's employment or relationship with Cleveland-Cliffs.

                  11. COMPETITIVE ACTIVITY: For a period of twenty-four (24)
months from and after any termination of employment following the occurrence of
a Change of Control, the Executive shall not become an officer, director, joint
venturer, employee, consultant, 5-percent or more shareholder (directly or
indirectly), or promote or assist (financially or otherwise) any entity which
competes in any business in which Cleveland-Cliffs or any of its affiliates are
engaged as of the date-of the Change of Control. For this purpose, business is
defined as the iron and steel industry. The provisions of this Section 11 shall,
following a Change of Control, supersede and be in lieu of any similar provision
in any other plan or agreement involving Cleveland-Cliffs and the Executive,
whether now existing or hereinafter adopted or entered into, including, but not
limited to, the SRP.

                  12. RELEASE: Payment of the Severance Compensation set forth
in Section 5 hereof is conditioned upon the Executive executing and delivering a
release (the "Release") satisfactory to Cleveland-Cliffs releasing
Cleveland-Cliffs, its directors, employees and affiliates from any and all
claims, demands, damages, actions and/or causes of action whatsoever, which the
Executive may have had on account of the termination of his employment,
including, but not limited to claims of discrimination, including on the basis
of sex, race, age, national


<PAGE>   79
                                                                             16

origin, religion, or handicapped status (with all applicable periods during
which the Executive may revoke the Release or any provision thereof having
expired), and any and all claims, demands and causes of action for retirement
(other than under any "pension benefit plan" or under any "welfare benefit plan"
of Cleveland-Cliffs (as the terms "pension benefit plan" and "welfare benefit
plan" are defined in Section 3 of ERISA) other than the SRP), severance or other
termination pay, and because pursuant to Section 5(a) the Executive is entitled
to lump sum payments of Incentive Pay and benefits under the SRP, under the SRP
and any incentive compensation plans and arrangements of Cleveland-Cliffs
described in Section 3(b). Such Release shall not, however, apply to the
obligations of Cleveland-Cliffs arising under this Agreement, or rights of
indemnification the Executive may have under the Regulations of Cleveland-Cliffs
or by contract or by statute.

                  13. LEGAL FEES AND EXPENSES: (a) It is the intent of
Cleveland-Cliffs that the Executive not be required to incur any expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Executive hereunder.
Accordingly, if it should appear to the Executive that Cleveland-Cliffs has
failed to comply with any of its obligations under this Agreement or in the
event that Cleveland-Cliffs or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Executive the benefits intended to be provided to the
Executive hereunder, Cleveland-Cliffs irrevocably authorizes the Executive from
time to time to retain counsel of his choice, at the expense of Cleveland-Cliffs
as hereafter provided, to represent the Executive in connection with the
initiation or defense of any such litigation or other legal action, whether by
or against Cleveland-Cliffs or any Director, officer, stockholder or other
person affiliated with Cleveland-Cliffs, in any jurisdiction. Notwithstanding
any existing or prior attorney-client relationship between Cleveland-Cliffs and
such counsel, Cleveland-Cliffs irrevocably consents to the Executive's entering
into an attorney-client relationship with such counsel, and in that connection
Cleveland-Cliffs and the Executive agree that a confidential relationship shall
exist between the Executive and such counsel. Cleveland-Cliffs shall promptly
pay or cause to be paid and shall be solely responsible for any and all
attorneys' and related fees and expenses incurred by the Executive as a result
of Cleveland-Cliffs' failure to perform this Agreement or any provision hereof
or as a result of Cleveland-Cliffs or any person contesting the validity or
enforceability of this Agreement or any provision hereof as aforesaid.

                   (b) To ensure that the provisions of this Agreement can be
enforced by Executive, certain trust arrangements ("Trusts") have been
established between KeyTrust Company of Ohio, N.A., as Trustee ("Trustee"), and
Cleveland-Cliffs. Trust Agreement No. 1 (Amended and Restated Effective June 1,
1997) ("Trust Agreement




<PAGE>   80
                                                                             17

No. 1") dated June 12, 1997, and Trust Agreement No. 2 (Amended and Restated
Effective June 1, 1997) ("Trust Agreement No. 2") dated June 12, 1997, as
amended and/or restated, between the Trustee and Cleveland-Cliffs, are attached
as Exhibits B and C, respectively. A Trust Agreement No. 7 ("Trust Agreement No.
7") dated April 9, 1991, as amended, between the Trustee and Cleveland-Cliffs,
is attached as Exhibit D. Each such Trust Agreement shall be considered a part
of this Agreement and shall set forth the terms and conditions relating to
payment under Trust Agreement No. 1 of compensation and other benefits pursuant
to Sections 3, 5 and 8 and pension benefits pursuant to Sections 3, 5 and 6 owed
by Cleveland-Cliffs, payment from Trust Agreement No. 7 of certain pension
benefits pursuant to Sections 3, 5 and 6 owed by Cleveland-Cliffs, and payment
from Trust Agreement No. 2 for attorneys' fees and related fees and expenses
pursuant to Section 13(a) hereof owed by Cleveland-Cliffs. Executive shall make
demand on Cleveland-Cliffs for any payments due Executive pursuant to Section
13(a) hereof prior to making demand therefor on the Trustee under Trust
Agreement No. 2.

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

                  (A) 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 of Control (or on such fifth business day if
         the Board has declared a Change of Control to be imminent) of the
         payments to be made to Executive under the provisions of Sections 3, 5,
         6 and 8 hereof, such present value to be computed using the assumptions
         set forth in Section 5(a) hereof and the computations provided for in
         Section 8 hereof less (II) the balance in the Executive's account
         provided for in Section 7(b) of Trust Agreement No. 1 as of the most
         recent completed valuation thereof, less (III) the balance in the
         Executive's account provided for in Section 7(b) of Trust Agreement No.
         7 as of the most recent completed valuation thereof, as certified by
         the Trustee under each of Trust Agreement No. 1 and Trust Agreement No.
         7; provided, however, that if the Trustee under Trust Agreement No. 1
         and/or Trust Agreement No. 7, respectively, does not so certify by the
         end of the fourth (4th) business day after the earlier of such Change
         of Control or declaration, then the balance of such respective account
         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
         Cleveland-Cliffs' obligation to pay compensation, pension and other
         benefits hereunder, it being the intent of Cleveland-Cliffs that assets
         in such Trusts be held as security for Cleveland-Cliffs' obligation to
         pay compensation, pension and other benefits under this Agreement; and
<PAGE>   81
                                                                              18

                  (B) 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 Executive's attorneys' and related
         fees and expenses by the Trustee pursuant to Trust Agreement No. 2
         shall, to the extent thereof, discharge Cleveland-Cliffs' obligation
         hereunder, it being the intent of Cleveland-Cliffs that assets in such
         Trust be held as security for Cleveland-Cliffs' obligation under
         Section 13(a) hereof. Executive understands and acknowledges that the
         entire corpus of the Trust under Trust Agreement No. 2 will be $250,000
         and that said amount will be available to discharge not only the
         obligations of the Cleveland-Cliffs to Executive under Section 13(a)
         hereof, but also similar obligations of the Cleveland-Cliffs to other
         executives and employees under similar provisions of other agreements
         and plans.

                  14. EMPLOYMENT RIGHTS: Nothing expressed or implied in this
Agreement shall create any right or duty on the part of Cleveland-Cliffs or the
Executive to have the Executive remain in the employment of Cleveland-Cliffs at
any time prior to a Change of Control; provided, however, that any termination
of employment of the Executive or the removal of the Executive from the office
or position in Cleveland-Cliffs following the commencement of any discussion
with a third person that ultimately results in a Change of Control shall be
deemed to be a termination or removal of the Executive after a Change of Control
for purposes of this Agreement. Executive expressly acknowledges that he is an
employee at will, and that Cleveland-Cliffs may terminate him at any time during
the Period of Employment for any reason if Cleveland-Cliffs pays the Severance
Compensation provided for under Section 5 of this Agreement, and otherwise
comply with its other continuing covenants in this Agreement, including without
limitation, Sections 3 and 6.

                   15. WITHHOLDING OF TAXES: Cleveland-Cliffs may withhold from
any amounts payable under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or government regulation or ruling.

                  16. SUCCESSORS AND BINDING AGREEMENT: (a) Cleveland-Cliffs
shall require any successor (including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of
Cleveland-Cliffs whether by purchase, merger, consolidation, reorganization or
otherwise, and such successor shall thereafter be deemed "Cleveland-Cliffs" for
the purposes of this Agreement), by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent Cleveland-Cliffs would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of Cleveland-Cliffs and any successor
to Cleveland-Cliffs but shall not otherwise be assignable, transferable or
delegable by Cleveland-Cliffs.


<PAGE>   82
                                                                              19

                  (b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.

                  (c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 16. Without limiting the generality of the
foregoing, the 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 will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 16, Cleveland-Cliffs shall have no liability
to pay any amount so attempted to be assigned, transferred or delegated.

                  (d) The agreement of Cleveland-Cliffs to make payments and/or
provide benefits hereunder shall represent an unsecured obligation of
Cleveland-Cliffs.

                  (e) Cleveland-Cliffs and the Executive recognize that each
party will have no adequate remedy at law for breach by the other of any of the
agreements contained herein and, in the event of any such breach,
Cleveland-Cliffs and the Executive hereby agree and consent that the other shall
be entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.

                  17. NOTICE: For all purposes of this Agreement, all
communications including without limitation notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given when delivered or five business days after having been mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed to such party's address as specified below, or at such other
address as such party shall specify by notice to the other.

If to Cleveland-Cliffs, to:

                       Cleveland-Cliffs Inc
                       1100 Superior Avenue
                       Cleveland, Ohio  44114-2589
                       Attention:  Secretary

If to the Executive, to the last address shown on the records of
Cleveland-Cliffs. Notices of change of address shall be effective only upon
receipt.

                   18. GOVERNING LAW: The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws of such State.


<PAGE>   83
                                                                              20

                  19. VALIDITY: If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement 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.

                   20. AMENDMENT: This Agreement may be amended only by a
written instrument signed by the parties hereto, which makes specific reference
to this Agreement.

                  21. RIGHTS UNDER OTHER PLANS AND PROGRAMS: Anything in this
Agreement to the contrary notwithstanding, no provision of this Agreement is
intended, nor shall it be construed, to reduce or in any way restrict any
benefit to which Executive may be entitled under any other agreement, plan or
program providing benefits for Executive, including but not limited to the plans
described in Sections 3 and 5 of this Agreement.

                  22. MISCELLANEOUS: No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and Cleveland-Cliffs. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

                   23. COUNTERPARTS: This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same agreement.

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



<PAGE>   84
                                                                            21

                                                               

                  IN WITNESS WHEREOF, Cleveland-Cliffs has caused this Agreement
to be executed on its behalf by its duly authorized representative and Executive
has hereunto set his hand, all as of the date and year first above written.

                                       CLEVELAND-CLIFFS INC

                                       By /s/ M. Thomas Moore
                                         --------------------------------------
                                         Chairman and Chief
                                           Executive Officer


                                       /s/ W. R. Calfee
                                       ----------------------------------------
                                       William R. Calfee




<PAGE>   85


                                                                       Exhibit A

                              CLEVELAND-CLIFFS INC
                      SUPPLEMENTAL RETIREMENT BENEFIT PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
               ---------------------------------------------------



<PAGE>   86






                                TABLE OF CONTENTS

                                                                         PAGE

1.       DEFINITIONS......................................................  1
         -----------

2.       DETERMINATION OF THE SUPPLEMENTAL PENSION PLAN BENEFIT...........  3
         ------------------------------------------------------

3.       PAYMENT OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.................  4
         ------------------------------------------------

4.       FORFEITABILITY...................................................  6
         --------------

5.       GENERAL..........................................................  6
         -------

6.       ADOPTION OF SUPPLEMENTAL RETIREMENT BENEFIT PLAN.................  8
         ------------------------------------------------

7.       MISCELLANEOUS....................................................  8
         -------------

8.       AMENDMENT AND TERMINATION......................................... 9
         -------------------------

9.       EFFECTIVE DATE................................................... 10
         --------------



<PAGE>   87





                              CLEVELAND-CLIFFS INC
                      SUPPLEMENTAL RETIREMENT BENEFIT PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
               ---------------------------------------------------

                  WHEREAS, Cleveland-Cliffs Inc ("Cleveland-Cliffs") and its
subsidiary corporations and affiliates have established, or may hereafter
establish, one or more qualified retirement plans;

                  WHEREAS, the qualified retirement plans, pursuant to Sections
401(a) and 415 of the Internal Revenue Code of 1986, as amended, place certain
limitations on the amount of contributions that would otherwise be made
thereunder for certain participants;

                  WHEREAS, Cleveland-Cliffs now desires to provide for the
contributions which would otherwise have been made for such participants under
certain of its qualified retirement plans except for such limitations, in
consideration of services performed and to be performed by each such participant
for Cleveland-Cliffs and its subsidiaries and affiliates; and

                  WHEREAS, Cleveland-Cliffs has entered into, and
Cleveland-Cliffs and its subsidiary corporations and affiliates may in the
future enter into, agreements with certain executives providing for additional
service credit and/or other features for purposes of computing retirement
benefits, in consideration of services performed and to be performed by such
executives for Cleveland-Cliffs and its subsidiaries and affiliates.

                  NOW, THEREFORE, Cleveland-Cliffs hereby amends and restates
and publishes the Supplemental Retirement Benefit Plan heretofore established by
it, which shall contain the following terms and conditions:

                  1.       DEFINITIONS.  A.  The following words and phrases
when used in this Plan with initial capital letters shall have the following
respective meanings, unless the context clearly indicates otherwise. The
masculine whenever used in this Plan shall include the feminine.

                  B.  "AFFILIATE" shall mean any partnership or joint venture 
of which any member of the Controlled Group is a partner or venturer and which
shall adopt this Plan pursuant to paragraph 6.

                  C. "BENEFICIARY" shall mean such person or persons (natural or
otherwise) as may be designated by the Participant as his Beneficiary under this
Plan. Such a designation may be made, and may be revoked or changed (without the
consent of any previously designated Beneficiary), only by an instrument (in
form acceptable to Cleveland-Cliffs) signed by the Participant and may be
revoked or changed (without the consent of any previously designated
Beneficiary), only by an instrument (in form acceptable to Cleveland-Cliffs) 
signed by the Participant 


<PAGE>   88


                                                                               2

and filed with Cleveland-Cliffs prior to the Participant's death. In the absence
of such a designation and at any other time when there is no existing
Beneficiary designated by the Participant to whom payment is to be made pursuant
to his designation, his Beneficiary shall be his beneficiary under the Pension
Plan. A person designated by a Participant as his Beneficiary who or which
ceases to exist shall not be entitled to any part of any payment thereafter to
be made to the Participant's Beneficiary unless the Participant's designation
specifically provided to the contrary. If two or more persons designated as a
Participant's Beneficiary are in existence, the amount of any payment to the
Beneficiary under this Plan shall be divided equally among such persons unless
the Participant's designation specifically provided to the contrary.
Notwithstanding the foregoing, the Beneficiary of a Participant who elects the
form of benefit elected by the Participant under the Pension Plan shall be the
same beneficiary designated by him or her thereunder.

                  D.  "CODE" shall mean the Internal Revenue Code of 1986, as 
it has been and may be amended from time to time.

                  E.  "CODE LIMITATIONS" shall mean the limitations imposed by 
Sections 401(a) and 415 of the Code, or any successor thereto, on the amount of
the benefits which may be payable to a Participant from the Pension Plan.

                  F. "CONTROLLED GROUP" shall mean Cleveland-Cliffs and any
corporation in an unbroken chain of corporations beginning with
Cleveland-Cliffs, if each of the corporations other than the last corporation in
the chain owns or controls, directly or indirectly, stock possessing not less
than fifty percent of the total combined voting power of all classes of stock in
one of the other corporations.

                  G.  "EMPLOYER(S)" shall mean Cleveland-Cliffs and any
other member of the Controlled Group and any Affiliate which
shall adopt this Plan pursuant to paragraph 6.

                  H. "PARTICIPANT" shall mean each person (i) who is a
participant in the Pension Plan, (ii) who is a senior corporate officer of
Cleveland-Cliffs or a full-time salaried employee of an Employer who has a
Management Performance Incentive Plan Salary Grade of EX-28 or above, and (iii)
who as a result of participation in this Plan is entitled to a Supplemental
Benefit under this Plan. Each person who is as a Participant under this Plan
shall be notified in writing of such fact by his Employer, which shall also
cause a copy of the Plan to be delivered to such person.

                  I. "PENSION PLAN" shall mean, with respect to any Participant,
the defined benefit plan specified on Exhibit A hereto in which he participates.

                  J.  "SUPPLEMENTAL AGREEMENT" shall mean, with respect
to any Participant, an agreement between the Participant and an 


<PAGE>   89


                                                                               3

Employer, and approved by Cleveland-Cliffs if it is not the Employer, which
provides for additional service credit and/or other features for purposes of
computing retirement benefits.

                  K. "SUPPLEMENTAL BENEFIT" or "SUPPLEMENTAL PENSION PLAN 
BENEFIT" shall mean a retirement benefit determined as provided in paragraph 2.

                  L. "SUPPLEMENTAL RETIREMENT BENEFIT PLAN" or "PLAN" shall 
mean this Plan, as the same may hereafter be amended or restated from time to
time.

                  2. DETERMINATION OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.
Each Participant or Beneficiary of a deceased Participant whose benefits under
the Pension Plan payable on or after January l, 1995 are reduced (a) due to the
Code Limitations, or (b) due to deferrals of compensation by such Participant
under the Cleveland-Cliffs Inc Voluntary Non-Qualified Deferred Compensation
Plan (the "Deferred Compensation Plan"), and each Participant who has entered
into a Supplemental Agreement with his Employer (and, where applicable a
Beneficiary of a deceased Participant), shall be entitled to a Supplemental
Pension Plan Benefit, which shall be determined as hereinafter provided. A
Supplemental Pension Plan Benefit shall be a monthly retirement benefit equal to
the difference between (i) the amount of the monthly benefit payable on and
after January l, 1995 to the Participant or his Beneficiary under the Pension
Plan, determined under the Pension Plan as in effect on the date of the
Participant's termination of employment with the Controlled Group and any
Affiliate (and payable in the same optional form as his Actual Pension Plan
Benefit, as defined below), but calculated without regard to any reduction in
the Participant's compensation pursuant to the Deferred Compensation Plan, and
as if the Pension Plan did not contain a provision (including any phase-in or
extended wear away provision) implementing the Code Limitations, and after
giving effect to the provisions of any Supplemental Agreement, and (ii) the
amount of the monthly benefit in fact payable on and after January 1, 1995 to
the Participant or his Beneficiary under the Pension Plan. If the benefit
payable to a Participant or Beneficiary pursuant to clause (ii) of the
immediately preceding sentence (herein referred to as "Actual Pension Plan
Benefit") is payable in a form other than a monthly benefit, such Actual Pension
Plan Benefit shall be adjusted to a monthly benefit which is the actuarial
equivalent of such Actual Pension Plan Benefit for the purpose of calculating
the monthly Supplemental Pension Plan Benefit of the Participant or Beneficiary
pursuant to the preceding sentence. For any Participant whose benefits become
payable under the Pension Plan on or after January 1, 1995, the Supplemental
Pension Plan Benefit includes any "Retirement Plan Augmentation Benefit" which
the Participant shall have accrued under the Deferred Compensation Plan prior to
the amendment of such Plan as of January l, 1991 to delete such Benefit. The
acceptance by the Participant or his Beneficiary of any Supplemental Pension
Plan Benefit pursuant to paragraph 3 shall constitute payment of the 


<PAGE>   90

                                                                               4

Retirement Plan Augmentation Benefit included therein for purposes of the
Deferred Compensation Plan prior to such amendment.

                  3.       PAYMENT OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.

                  (a)      A Participant's (or his Beneficiary's)
                           Supplemental Pension Plan Benefit (calculated as
                           provided in paragraph 2) shall be converted, at
                           the time of his termination of employment with the
                           Controlled Group and each Affiliate, into ten
                           annual installment payments (the "Ten Installment
                           Payments") of equivalent actuarial value.  The
                           equivalent actuarial value shall be determined by
                           the actuary selected by Cleveland-Cliffs based on
                           the 1971 TPF&C Forecast Mortality Table set back
                           one year, the Pension Benefit Guaranty Corporation
                           interest rate for immediate annuities then in
                           effect, and other factors then in effect for
                           purposes of the Pension Plan.

                  (b)      If the Participant voluntarily terminates
                           employment with, or retires under the terms of the
                           Pension Plan from, the Controlled Group and each
                           Affiliate, or the Participant's employment with
                           the Controlled Group and each Affiliate is
                           involuntarily terminated, the Participant's former
                           Employer shall pay the Ten Installment Payments to
                           the Participant beginning on the first day of the
                           month following the Participant's retirement under
                           the Pension Plan, and on each anniversary
                           thereafter until the Ten Installment Payments have
                           been made; provided, however, that if the
                           Participant has effectively elected another form
                           of distribution, such Participant's former
                           Employer shall pay or commence payment in such
                           other form of distribution beginning on the first
                           day of the month following the date of the
                           Participant's retirement under the Pension Plan.
                           A Participant who voluntarily terminates
                           employment with, or who retires under the terms of
                           the Pension Plan from, the Controlled Group and
                           each Affiliate may by written notice filed with
                           the Administrator at least one (1) year prior to
                           the Participant's voluntary termination of
                           employment with, or retirement from, the
                           Controlled Group and each Affiliate elect to defer
                           commencement of the payment of his 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 Administrator; provided that any election
                           made less than one (1) year prior to the
                           Participant's voluntary termination of employment 


<PAGE>   91


                                                                               5

                           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 this paragraph 3.

                  (c)      A Participant may elect to receive his Supplemental
                           Pension Plan Benefit in one of the following forms of
                           distribution in lieu of the Ten Installment Payments:

                           (1)      Lump sum payment;

                           (2)      Annual installments over 2 to 15 years;

                           (3)      A combination of (1) and (2) above with the
                                    percentage payable under each option
                                    specifically designated by the Participant;
                                    or

                           (4)      The form of benefit distribution elected by
                                    the Participant under the Pension Plan.

                           Payments made under these options shall commence as
                           of the first day of the month following the
                           Participant's retirement under the Pension Plan;
                           provided, however, that with respect to a lump sum
                           payment, such payment shall be made at the end of the
                           of the first month of retirement or at the end of the
                           month following death.

                           The payments made under these forms shall be of
                           equivalent actuarial value to the Ten Installment
                           Payments as determined by the actuary selected by
                           Cleveland-Cliffs based on the actuarial factors and
                           assumptions provided for in the second sentence of
                           paragraph 3(a). Notwithstanding the foregoing, the
                           Administrator may, at any time, direct that annual
                           installments shall be made quarterly. If the
                           Participant dies before receiving all of the
                           installment payments, the remaining installment
                           payments shall be paid in a lump sum to the
                           Participant's Beneficiary. Any co-pensioner or
                           survivor payments elected under clause (4) of this
                           paragraph 3(c) shall be paid to the co-pensioner or
                           survivor, as appropriate. The Participant's election
                           of one of the forms of distribution set forth above
                           shall be made by written notice filed with the
                           Administrator at least one (1) year prior to the
                           Participant's voluntary or involuntary termination of
                           employment, retirement, death or disability. 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 Administrator; provided 


<PAGE>   92

                                                                               6

                           that any election made less than one (1) year prior
                           to the Participant's voluntary or involuntary
                           termination of employment, retirement, death or
                           disability 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 Administrator may, in its sole discretion,
                           waive such one (1) year period upon a request of the
                           Participant made while an active employee of his or
                           her Employer.

                  (d)      Anything contained in this paragraph 3 to the
                           contrary notwithstanding, in the event a
                           Participant's employment with the Controlled Group
                           and each Affiliate is involuntarily terminated,
                           the Administrator may, at any time, direct
                           immediate payment of such Participant's benefit
                           under the Plan and the manner of distribution for
                           such payment; provided, however, that if the
                           administrator elects immediate payment as set
                           forth in this paragraph 3(d), such payment shall
                           not be made in accordance with the distribution
                           alternative described in paragraph 3(c)(4) of the
                           Plan.

                  (e)      Notwithstanding any other provision of this
                           paragraph 3, a Participant may elect to receive a
                           lump sum distribution of part or all of his or her
                           benefits under clause (1), (2), or (3) of
                           paragraph 3(c) if (and only if) the amount 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 Administrator.
                           The remaining six percent (6%) of the electing
                           Participant's benefit balance subject to such lump
                           sum distribution shall be forfeited.

                  4. FORFEITABILITY. Anything herein to the contrary
notwithstanding, if the Board of Directors of Cleveland-Cliffs shall determine
in good faith that a Participant who is entitled to a benefit hereunder by
reason of termination of his employment with the Controlled Group and each
Affiliate, during the period of 5 years after termination of his employment or
until he attains age 65, whichever period is shorter, has engaged in a business
competitive with Cleveland-Cliffs or any member of the Controlled Group or any
Affiliate without the prior written consent of Cleveland-Cliffs, such
Participant's rights to a supplemental Pension Plan Benefit hereunder and the
rights, if any, of his Beneficiary shall be terminated and no further
Supplemental Benefit shall be paid to him or his Beneficiary hereunder.

                  5.       GENERAL.  A.  The entire cost of this Supplemental
Retirement Benefit Plan shall be paid from the general assets 


<PAGE>   93
                                                                               7

of one or more of the Employers. It is the intent of the Employers to so pay
benefits under the Plan as they become due; provided, however, that
Cleveland-Cliffs may, in its sole discretion, establish or cause to be
established a trust account for any or each Participant pursuant to an
agreement, or agreements, with a bank and direct that some or all of a
Participant's benefits under the Plan be paid from the general assets of his
Employer which are transferred to the custody of such bank to be held by it in
such trust account as property of the Employer subject to the claims of the
Employer's creditors until such time as benefit payments pursuant to the Plan
are made from such assets in accordance with such agreement; and until any such
payment is made, neither the Plan nor any Participant or Beneficiary shall have
any preferred claim on, or any beneficial ownership interest in, such assets. No
liability for the payment of benefits under the Plan shall be imposed upon any
officer, director, employee, or stockholder of Cleveland-Cliffs or other
Employer.

                  B. No right or interest of a Participant or his Beneficiary
under this Supplemental Retirement Benefit Plan shall be anticipated, assigned
(either at law or in equity) or alienated by the Participant or his Beneficiary,
nor shall any such right or interest be subject to attachment, garnishment,
levy, execution or other legal or equitable process or in any manner be liable
for or subject to the debts of any Participant or Beneficiary. If any
Participant or Beneficiary shall attempt to or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his benefits under the Plan or any part
thereof, or if by reason of his bankruptcy or other event happening at any time
such benefits would devolve upon anyone else or would not be enjoyed by him,
then Cleveland-Cliffs may terminate his interest in any such benefit and hold or
apply it to or for his benefit or the benefit of his spouse, children or other
person or persons in fact dependent upon him, or any of them, in such a manner
as Cleveland-Cliffs may deem proper; provided, however, that the provisions of
this sentence shall not be applicable to the surviving spouse of any deceased
Participant if Cleveland-Cliffs consent: to such inapplicability, which consent
shall not unreasonably be withheld.

                  C. Employment rights shall not be enlarged or affected hereby.
The Employers shall continue to have the right to discharge or retire a
Participant, with or without cause.

                  D. Notwithstanding any other provisions of this Plan to the 
contrary, if Cleveland-Cliffs 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, Cleveland-Cliffs 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 his then vested Supplemental Benefit. Upon
such payment, no benefits shall thereafter be payable under this


<PAGE>   94
                                                                               8

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
Supplemental Benefit shall be deemed to be cancelled.

                  6. ADOPTION OF SUPPLEMENTAL RETIREMENT BENEFIT PLAN. Any
member of the Controlled Group or any Affiliate which is an employer under the
Pension Plan may become an Employer hereunder with the written consent of
Cleveland-Cliffs if such member or such Affiliate executes an instrument
evidencing its adoption of the Supplemental Retirement Benefit Plan and files a
copy thereof with Cleveland-Cliffs. Such instrument of adoption may be subject
to such terms and conditions as Cleveland-Cliffs requires or approves.

                  7.  MISCELLANEOUS.  A.  The Plan shall be administered by the
Plan Administrator (the "Administrator"). The Administrator shall have such
powers as may be necessary to discharge his duties hereunder, including, but not
by way of limitation, 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) and
determine the amount and time of payment of any benefits hereunder. The
Administrator may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit, and may from time to time consult with
legal counsel who may be counsel to Cleveland-Cliffs. The Administrator shall
have no power to add to, subtract from or modify any of the terms of the Plan,
or to change or add to any benefits provided under the Plan, or to waive or fail
to apply any requirements of eligibility for a benefit under the Plan. No member
of the Administrator shall act in respect of his own benefits. All decisions and
determinations by the Administrator shall be final and binding on all parties.
All decisions of the Administrator shall be made by the vote of the majority, if
applicable, including actions and writing taken without a meeting. All
elections, notices and directions under the Plan by a Participant shall be made
on such forms as the Administrator shall prescribe.

                  B. Cleveland-Cliffs shall be the "Administrator" and
the "Plan Sponsor" under the Plan for purposes of ERISA.

                  C. Except to the extent federal law controls, all questions 
pertaining to the construction, validity and effect of the provisions hereof
shall be determined in accordance with the laws of the State of Ohio.

                  D. Whenever there is denied, whether in whole or in part, a
claim for benefits under the Plan filed by any person (herein referred to as the
"Claimant"), the plan administrator shall transmit a written notice of such
decision to the Claimant, which notice shall be written in a manner calculated
to be understood by the Claimant and shall contain a statement of the
specific reasons for the denial of the claim and statement 


<PAGE>   95
                                                                               9

advising the Claimant that, within 60 days of the date on which he receives such
notice, he may obtain review of such decision in accordance with the procedures
hereinafter set forth. Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing with the
plan administrator a written request therefor, which request shall contain the
following information:

                  (i) the date on which the Claimant's request was filed with
         the plan administrator; provided, however, that the date on which the
         Claimant's request for review was in fact filed with the plan
         administrator shall control in the event that the date of the actual
         filing is later than the date stated by the Claimant pursuant to this
         paragraph;

                  (ii) the specific portions of the denial of his claim
         which the Claimant requests the plan administrator to
         review;

                  (iii) a statement by the Claimant setting forth the basis upon
         which he believes the plan administrator should reverse the previous
         denial of his claim for benefits and accept his claim as made; and

                  (iv) any written material (offered as exhibits) which the
         Claimant desires the plan administrator to examine in its consideration
         of his position as stated pursuant to clause (iii) above.

Within 60 days of the date determined pursuant to clause (i) above, the plan
administrator shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits. Within 60 days of the date of such hearing, the
plan administrator shall render its written decision on review, written in a
manner calculated to be understood by the Claimant, specifying the reasons and
Plan provisions upon which its decision was based.

                  E. Supplemental Pension Plan Benefits shall be subject to
applicable withholding and such other deductions as shall at the time of payment
be required or appropriate under any Federal, State or Local law. In addition,
Cleveland-Cliffs may withhold from a Participant's "other income" (as
hereinafter defined) any amount required or appropriate to be currently withheld
from such Participant's other income pursuant to any Federal, State or Local
law. For purposes of this subparagraph E, "other income" shall mean any
remuneration currently paid to a Participant by an Employer.

                  8. AMENDMENT AND TERMINATION.  A.  Cleveland-Cliffs has 
reserved and does hereby reserve the right to amend, at any time, any or all of
the provisions of the Supplemental Retirement Benefit Plan for all Employers,
without the consent of any other Employer or any Participant, Beneficiary or any
other person. Any such amendment shall be expressed in an instrument executed 


<PAGE>   96

                                                                              10

by Cleveland-Cliffs and shall become effective as of the date designated in such
instrument or, if no such date is specified, on the date of its execution.

                  B. Cleveland-Cliffs has reserved, and does hereby reserve, the
right to terminate the Supplemental Retirement Benefit Plan at any time for all
Employers, without the consent of any other Employer or of any Participant,
Beneficiary or any other person. Such termination shall be expressed in an
instrument executed by Cleveland-Cliffs and shall become effective as of the
date designated in such instrument, or if no date is specified, on the date of
its execution. Any other Employer which shall have adopted the Plan may, with
the written consent of Cleveland-Cliffs, elect separately to withdraw from the
Plan and such withdrawal shall constitute a termination of the Plan as to it,
but it shall continue to be an Employer for the purposes hereof as to
Participants or Beneficiaries to whom it owes obligations hereunder. Any such
withdrawal and termination shall be expressed in an instrument executed by the
terminating Employer and shall become effective as of the date designated in
such instrument or, if no date is specified, on the date of its execution.

                  C. Notwithstanding the foregoing provisions hereof, no
amendment or termination of the Supplemental Retirement Benefit Plan shall,
without the consent of the Participant (or, in the case of his death, his
Beneficiary), adversely affect (i) the benefit under the Plan of any Participant
or Beneficiary then entitled to receive a benefit under the Plan or (ii) the
right of any other Participant to receive upon termination of his employment
with the Controlled Group and each Affiliate (or the right of his Beneficiary to
receive upon such Participant's death) that benefit which would have been
received under the Plan if such employment of the Participant had terminated
immediately prior to the amendment or termination of the Plan. Upon any
termination of the Plan, each affected Participant's Supplemental Benefit shall
be determined and distributed to him or, in the case of his death, to his
Beneficiary as provided in paragraph 3 as if the employment of the Participant
with the Controlled Group and each Affiliate had terminated immediately prior to
the termination of the Plan.

         9. EFFECTIVE DATE.  The amended and restated Supplemental Retirement 
Benefit Plan shall be effective as of January 1, 1997.

                  IN WITNESS WHEREOF, Cleveland-Cliffs Inc, pursuant to the
order of its Board of Directors, has executed this amended and restated
Supplemental Retirement Benefit Plan at Cleveland, Ohio, this 24th day of 
April, 1997.

                                             CLEVELAND-CLIFFS INC

                                             By /s/ R.F. Novak
                                               -----------------------------
                                               Vice President - Human Resources


<PAGE>   97

                                                                              11

                                    EXHIBIT A
                                    ---------

Pension Plans
-------------

Pension Plan for Salaried Employees of Cleveland-Cliffs Inc

Pension Plan for Salaried Employees of the Cleveland-Cliffs Iron
Company and its Associated Employers

Retirement Plan for Salaried Employees of Northshore Mining
Company and Silver Bay Power Company
<PAGE>   98


                                                                       Exhibit B

                              TRUST AGREEMENT NO. 1

                  (Amended and Restated Effective June 1, 1997)
                  ---------------------------------------------

                  This Trust Agreement No. l (Amended and Restated Effective
June 1, 1997) ("Trust Agreement No. 1") is made on this 12th day of June, 1997, 
by and between Cleveland-Cliffs Inc, an Ohio corporation ("Cleveland-Cliffs"), 
and KeyTrust Company of Ohio, N.A., a national banking association, as trustee 
(the "Trustee").

                                   WITNESSETH:

                  WHEREAS, Cleveland-Cliffs has entered into an agreement with
each of the executives (the "Executives") listed (from time to time as provided
in Section 9(c) hereof) on Exhibit A hereto (the agreements are referred to
herein singularly as an "Agreement" and collectively as the "Agreements");

                  WHEREAS, pursuant to the provisions of the Cleveland-Cliffs
Inc Supplemental Retirement Benefit Plan (as Amended and Restated Effective
January 1, 1997), as the same has been or may hereafter be supplemented, amended
or restated, or any successor thereto (the "Plan"), the Executives and
beneficiaries of the Executives (also listed on Exhibit A hereto from time to
time as provided in Section 9(c) hereof), may become entitled to certain
benefits;

                  WHEREAS, (a) the Agreements provide for the payment of certain
current and deferred compensation and other benefits to the Executives or their
beneficiaries thereunder following a "Change of Control", as that term is
defined in Exhibit B hereto, and (b) the Plan provides for the payment of
certain benefits to



<PAGE>   99
                                                                               2

the Executives and beneficiaries of Executives that (i) would be payable
pursuant to the qualified retirement plans established by Cleveland-Cliffs and
its subsidiary corporations and affiliates were it not for certain limitations
imposed by the Internal Revenue Code of 1986, as amended (the "Code"), and (ii)
are or may become due under certain agreements entered into (or which may be
entered into) by Cleveland-Cliffs and its subsidiary corporations and affiliates
granting additional service credit or other features for purposes of computing
retirement benefits, and (c) Cleveland-Cliffs wishes specifically to assure the
payment to the Executives and beneficiaries of Executives (Executives and
beneficiaries of Executives are referred to herein singularly as a "Trust
Beneficiary" and collectively as the "Trust Beneficiaries") of amounts due under
the Agreements and the Plan (collectively referred to herein as the "Benefits");

                  WHEREAS, subject to Section 9 hereof, the amounts and timing
of Benefits to which each Trust Beneficiary is presently or may become entitled
to are as provided in and determined under the Agreements and the Plan;

                  WHEREAS, on October 28, 1987, Cleveland-Cliffs and Ameritrust
Company National Association, a predecessor of the Trustee, entered into a trust
agreement ("Trust Agreement No. 1") to provide for the payment of certain
benefits that may become payable to certain executives, beneficiaries of such
executives, and their beneficiaries under agreements then in effect between 


<PAGE>   100
                                                                               3

Cleveland-Cliffs and the executives and under the Plan, as it was in effect at
such time;

                  WHEREAS, Trust Agreement No. 1 was amended and restated
by an Amended and Restated Trust Agreement No. 1 dated March 9, 1992;

                  WHEREAS, Cleveland-Cliffs desires to amend and restate Trust
Agreement No. 1 heretofore entered into and has transferred or will transfer to
the trust (the "Trust") established by this Trust Agreement No. 1 assets which
shall be held therein subject to the claims of the creditors of Cleveland-Cliffs
to the extent set forth in Section 3 hereof until paid in full to all Trust
Beneficiaries as Benefits in such manner and at such times as specified herein
unless Cleveland-Cliffs is Insolvent (as defined herein) at the time that such
Benefits become payable; and

                  WHEREAS, Cleveland-Cliffs shall be considered "Insolvent" for
purposes of this Trust Agreement No. 1 at such time as Cleveland-Cliffs (i) is
subject to a pending voluntary or involuntary proceeding as a debtor under the
United States Bankruptcy Code, as heretofore or hereafter amended, or (ii) is
unable to pay its debts as they mature.

                  NOW, THEREFORE, the parties amend and restate Trust Agreement
No. 1 and agree that the Trust shall be comprised, held and disposed of as
follows:

                  1.  TRUST FUND: (a) Subject to the claims of its creditors 
to the extent set forth in Section 3 hereof, Cleveland-Cliffs (i) hereby 
deposits with the Trustee in trust Ten Dollars 


<PAGE>   101
                                                                               4

($10.00) which shall become the principal of this Trust, and (ii)
Cleveland-Cliffs may from time to time make additional deposits of cash or other
property in the Trust to augment such principal. The principal of the Trust
shall be held, administered and disposed of by the Trustee as herein provided,
but no payments of all or any portion of the principal of the Trust or earnings
thereon shall be made to Cleveland-Cliffs or any other person or entity on
behalf of Cleveland-Cliffs except as herein expressly provided.

                  (b) The Trust hereby established shall be revocable by
Cleveland-Cliffs at any time prior to the date on which occurs a Change of
Control, and on or after such date (the "Irrevocability Date"), this Trust shall
be irrevocable. In the event that the Irrevocability Date has occurred,
Cleveland-Cliffs shall so notify the Trustee promptly.

                  (c) The principal of the Trust and any earnings thereon shall
be held in trust separate and apart from other funds of Cleveland-Cliffs
exclusively for the uses and purposes herein set forth. No Trust Beneficiary
shall have any preferred claim on, or any beneficial ownership interest in, any
assets of the Trust prior to the time that such assets are paid to a Trust
Beneficiary as Benefits as provided herein.

                  (d)  The Trust is intended to be a grantor trust, within the 
meaning of section 671 of the Code, or any successor provision thereto, and
shall be construed accordingly. The Trust is not designed to qualify under
Section 401(a) of the Code or to 


<PAGE>   102
                                                                               5

be subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The Trust established under this Trust Agreement No.
1 does not fund and is not intended to fund the Agreements or the Plan or any
other employee benefit plan or program of Cleveland-Cliffs. Such Trust is and is
intended to be a depository arrangement with the Trustee for the setting aside
of cash and other assets of Cleveland-Cliffs for the meeting of part or all of
its future obligations with respect to Benefits.

                  2. PAYMENTS TO TRUST BENEFICIARIES. (a) Provided that the
Trustee has not actually received notice as provided in Section 3 hereof that
Cleveland-Cliffs is Insolvent and commencing with the earlier to occur of (i)
appropriate notice by Cleveland-Cliffs to the Trustee, or (ii) the
Irrevocability Date, the Trustee shall make payments of Benefits to each Trust
Beneficiary from the assets of the Trust in accordance with the terms of the
Agreement applicable to such Trust Beneficiary and of the Plan and subject to
Section 9 hereof. The Trustee shall make provision for withholding of any
federal, state, or local taxes that may be required to be withheld by the
Trustee in connection with the payment of any Benefits hereunder.

                  (b) If the balance of a separate account maintained for a
Trust Beneficiary pursuant to Section 7(b) hereof is not sufficient to provide
for full payment of Benefits to which a Trust Beneficiary is entitled as
provided herein, then an amount up to the amount of such deficiency shall be
allocated to such 


<PAGE>   103
                                                                               6

separate account from the Master Account maintained pursuant to section 7(b)
hereof to the extent of the balance in the Master Account. If, after application
of the preceding sentence, the balance of a Trust Beneficiary's separate account
maintained pursuant to Section 7(b) is not sufficient to provide for full
payment of Benefits to which a Trust Beneficiary is entitled as provided herein,
then Cleveland-Cliffs shall make the balance of each such payment as provided in
the applicable provision of the Agreement or the Plan, as the case may be. No
payment to a Trust Beneficiary from the assets of the Trust shall exceed the
balance of such separate account.

                  (c) Any payments of Benefits by the Trustee pursuant to this
Trust Agreement No. 1 shall, to the extent thereof, discharge the obligation of
Cleveland-Cliffs to pay such Benefits under the Agreements and the Plan, it
being the intent of Cleveland-Cliffs that assets in the Trust established hereby
be held as security for the obligation of Cleveland-Cliffs to pay Benefits under
the Agreements and the Plan.

                  3.  THE TRUSTEE'S RESPONSIBILITY REGARDING PAYMENTS TO
A TRUST BENEFICIARY WHEN CLEVELAND-CLIFFS IS INSOLVENT: (a) At all times during
the continuance of this Trust, the principal and income of the Trust shall be
subject to claims of creditors of Cleveland-Cliffs as set forth in this Section
3(a). The Board of Directors of Cleveland-Cliffs ("the Board") and the Chief
Executive Officer of Cleveland-Cliffs ("the CEO") shall have the duty to inform
the Trustee if either the Board or the CEO


<PAGE>   104

                                                                               7

believes that Cleveland-Cliffs is Insolvent. If the Trustee receives a notice
from the Board, the CEO, or a creditor of Cleveland-Cliffs alleging that
Cleveland-Cliffs is Insolvent, then unless the Trustee independently determines
that Cleveland-Cliffs is not Insolvent, the Trustee shall (i) discontinue
payments to any Trust Beneficiary, (ii) hold the Trust assets for the benefit of
the general creditors of Cleveland-Cliffs, and (iii) promptly seek the
determination of a court of competent jurisdiction regarding the Insolvency of
Cleveland-Cliffs. The Trustee shall deliver any undistributed principal and
income in the Trust to the extent of the balances of the accounts maintained
hereunder necessary to satisfy the claims of the creditors of Cleveland-Cliffs
as a court of competent jurisdiction may direct. Such payments of principal and
income shall be borne by the Master Account to the extent thereof, and then by
the separate accounts of the Trust Beneficiaries in proportion to the balances
on the date of such court order of their respective accounts maintained pursuant
to Section 7(b) hereof; provided, however, that (iv) all Account Excesses shall
first be determined and allocated in accordance with Sections 4 and 7(b) hereof,
and (v) for this purpose the Threshold Percentage shall be equal to 100%. If
payments to any Trust Beneficiary have been discontinued pursuant to this
Section 3(a), the Trustee shall resume payments to such Trust Beneficiary only
after receipt of an order of a court of competent jurisdiction. The Trustee
shall have no duty to inquire as to whether 


<PAGE>   105
                                                                               8

Cleveland-Cliffs is Insolvent and may rely on information concerning the
Insolvency of Cleveland-Cliffs which has been furnished to the Trustee by any
person. Nothing in this Trust Agreement No. 1 shall in any way diminish any
rights of any Trust Beneficiary to pursue his rights as a general creditor of
Cleveland-Cliffs with respect to Benefits or otherwise, and the rights of each
Trust Beneficiary shall in no way be affected or diminished by any provision of
this Trust Agreement No. 1 or action taken pursuant to this Trust Agreement No.
1, except as provided in Section 2(c).

                  (b) If the Trustee discontinues payments of Benefits from the
Trust pursuant to Section 3(a) hereof, the Trustee shall, to the extent it has
liquid assets, place cash equal to the discontinued payments (to the extent not
paid to creditors pursuant to Section 3(a) and not paid to the Trustee pursuant
to Section 10 hereof) in such interest-bearing deposit accounts or certificates
of deposit (including any such accounts or certificate issued or offered by the
Trustee or any successor corporation but excluding obligations of
Cleveland-Cliffs) as determined by the Trustee in its sole discretion. If the
Trustee subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to the Trust Beneficiaries in accordance with this Trust
Agreement No. 1 during the period of such discontinuance, less the aggregate
amount of payments made to any Trust Beneficiary by Cleveland-Cliffs pursuant to
the 


<PAGE>   106
                                                                               9

Agreement applicable to such Trust Beneficiary and Plan during any such
period of discontinuance, together with interest on the net amount delayed
determined at a rate equal to the rate paid on the accounts or deposits selected
by the Trustee; provided, however, that no such payment shall exceed the balance
of the respective Trust Beneficiary's account as provided in Section 7(b)
hereof.

                  4. PAYMENTS TO CLEVELAND-CLIFFS. Except to the extent
expressly contemplated by Section 1(b) and this Section 4, Cleveland-Cliffs
shall have no right or power to direct the Trustee to return any of the Trust
assets to Cleveland-Cliffs before all payments of Benefits have been made to all
Trust Beneficiaries as herein provided. From time to time, but in no event
before the third anniversary of the date on which occurs a Change of Control, if
and when requested by Cleveland-Cliffs to do so, the Trustee shall engage the
services of Hewitt Associates ("Hewitt") or such other independent actuary as
may be mutually satisfactory to Cleveland-Cliffs and to the Trustee to determine
the maximum actuarial present values of the future Benefits that could become
payable under the Plan and the Agreements with respect to the Trust
Beneficiaries. The Trustee shall determine the fair market values of the Trust
assets allocated to the account of each Trust Beneficiary and to the Master
Account pursuant to Section 7(b) hereof. Cleveland-Cliffs shall pay the fees of
such independent actuary and of any appraiser engaged by the Trustee to value
any property held in the Trust. The 


<PAGE>   107
                                                                              10

independent actuary shall make its calculations based upon the assumption that
each Executive will have base salary and bonus increases from the date of
calculation through the termination of his employment by Cleveland-Cliffs at the
rate of the average increase in such Executive's salary and bonus during the
immediately preceding three years, and that no Executive will leave the employ
of Cleveland-Cliffs for any reason other than (a) death prior to retirement or
(b) retirement on or after age 62 or the corresponding date specified in the
Agreement at the age that would result in the maximum present value of Benefits
payable to him or his Trust Beneficiaries that is possible under the Plan and/or
the Agreement. In addition, the independent actuary shall use the 1983 Group
Annuity Mortality Table, an interest rate of 8%, Gross National Product Price
Deflator increases of 4%, or such other assumptions as are recommended by such
actuary and approved by Cleveland-Cliffs and, after the date of a Change of
Control, a majority of the Trust Beneficiaries (subject to the provisions of
Sections 11(b)(i) and (b)(ii) hereof). For purposes of this Trust Agreement No.
1, the "Fully Funded" amount with respect to the account of a Trust Beneficiary
maintained pursuant to Section 7(b) hereof shall be equal to the maximum
actuarial present value of the future Benefits that could become payable under
the Plan and the Agreements with respect to the Trust Beneficiary. The Trustee
shall then determine any allocations to and from the Master Account in
accordance with Section 7(b) hereof. Thereafter, upon the request of the

<PAGE>   108
                                                                              11

Company, the Trustee shall pay to Cleveland-Cliffs the excess, if any, of the
balance in the Master Account over 40% of the aggregate of all of the Fully
Funded amounts.

                  5. INVESTMENT OF TRUST FUND. (a) The Trustee shall invest and
reinvest the principal of the Trust including any income accumulated and added
to principal, as directed by the Organization and Compensation Committee of the
Board of Directors of Cleveland-Cliffs (which direction may not include
investment in common shares of Cleveland-Cliffs). In the absence of any such
direction, the Trustee shall have sole power to invest the assets of the Trust
(excluding investment in common shares of Cleveland-Cliffs). The Trustee shall
act at all times, however, with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent corporate trustee, acting in a
like capacity and familiar with such matters, would use in the conduct of an
enterprise of a like character and with like aims. The investment objective of
the Trustee shall be to preserve the principal of the Trust while obtaining a
reasonable total rate of return, measurement of which shall include market
appreciation or depreciation plus receipt of interest and dividends. The Trustee
shall be mindful, in the course of its management of the Trust, of the liquidity
demands on the Trust and any actuarial assumptions that may be communicated to
it from time to time in accordance with the provisions of this Trust Agreement
No. 1.


<PAGE>   109
                                                                              12

                  (b) In addition to authority given to the Trustee under
Section 8 hereof, the Trustee is empowered with respect to the assets of the
Trust:

                  (i) To invest and reinvest all or any part of the Trust
assets, in each and every kind of property, whether real, personal or mixed,
tangible or intangible, whether income or non-income producing, whether secured
or unsecured, and wherever situated, including, but not limited to, real estate,
shares of common and preferred stock, mortgages and bonds, leases (with or
without option to purchase), notes, debentures, equipment or collateral trust
certificates, and other corporate, individual or government securities or
obligations, time deposits (including savings deposit and certificates of
deposit in the Trustee or its affiliates if such deposits bear a reasonable rate
of interest), common or collective funds or trusts, and mutual funds or
investment companies, including affiliated investment companies and 12 B-1
funds. Cleveland-Cliffs acknowledges and agrees that the Trustee may receive
fees as a participating depository institution for services relating to the
investment of funds in an eligible mutual fund;

                  (ii) At such time or times, and upon such terms and conditions
as the Trustee shall deem advisable, to sell, convert, redeem, exchange, grant
options for the purchase or exchange of, or otherwise dispose of, any property
held hereunder, at public or private sale, for cash or upon credit, with or
without security, without obligation on the part of any person dealing 


<PAGE>   110

                                                                              13


with the Trustee to see to the application of the proceeds of or to inquire into
the validity, expediency, or propriety of any such disposal;

                  (iii) To manage, operate, repair, partition, and improve and
mortgage or lease (with or without an option to purchase) for any length of time
any property held in the Trust; to renew or extend any mortgage or lease, upon
such terms as the Trustee may deem expedient; to agree to reduction of the rate
of interest on any mortgage; to agree to any modification in the terms of any
lease or mortgage or of any guarantee pertaining to either of them; to exercise
and enforce any right of foreclosure; to bid on property in foreclosure; to take
a deed in lieu of foreclosure with or without paying consideration therefor and
in connection therewith to release the obligation on the bond secured by the
mortgage; and to exercise and enforce in any action, suit, or proceeding at law
or in equity any rights, covenants, conditions or remedies with respect to any
lease or mortgage or to any guarantee pertaining to either of them or to waive
any default in the performance thereof;

                  (iv) To join in or oppose any reorganization,
recapitalization, consolidation, merger or liquidation, or any plan therefor, or
any lease (with or without an option to purchase), mortgage or sale of the
property of any organization the securities of which are held in the Trust; to
pay from the Trust any assessments, charges or compensation specified in any
plan of reorganization, recapitalization, consolidation, merger or liquidation;
to deposit any property allotted to the Trust in any reorganization,
recapitalization, consolidation, merger 


<PAGE>   111
                                                                              14

or liquidation, to deposit any property with any committee or depository; and to
retain any property allotted to the Trust in any reorganization,
recapitalization, consolidation, merger or liquidation;

                  (v) To compromise, settle, or arbitrate any claim, debt or
obligation of or against the Trust; to enforce or abstain from enforcing any
right, claim, debt, or obligation; and to abandon any property determined by it
to be worthless;

                  (vi) To make, execute and deliver, as Trustee, any deeds,
conveyances, leases (with or without option to purchase), mortgages, options,
contracts, waivers or other instruments that the Trustee shall deem necessary or
desirable in the exercise of its powers under this Agreement; and

                  (vii) To pay out of the assets of the Trust all taxes imposed
or levied with respect to the Trust and in its discretion may contest the
validity or amount of any tax, assessment, penalty, claim, or demand respecting
the Trust and may institute, maintain, or defend against any related action or
proceeding either at law or in equity (and in such regard, the Trustee shall be
indemnified in accordance with Section 8(d) hereof).

                  6.  INCOME OF THE TRUST.  Except as provided in Section
3 hereof, during the continuance of this Trust all net income of
the Trust shall be allocated not less frequently than monthly 


<PAGE>   112

                                                                              15

among the Trust Beneficiaries' separate accounts in accordance with Section 7(b)
hereof.

                  7. ACCOUNTING BY TRUSTEE. (a) The Trustee shall keep records
in reasonable detail of all investments, receipts, disbursements and all other
transactions required to be done, including such specific records as shall be
agreed upon in writing by Cleveland-Cliffs and the Trustee. All such accounts,
books and records shall be open to inspection and audit at all reasonable times
by Cleveland-Cliffs, by any Trust Beneficiary, or in the event of a Trust
Beneficiary's death or adjudged incompetence, by an agent or representative of
any of the foregoing (as to such Trust Beneficiary's account). Within 60
calendar days following the close of each calendar year and within 60 calendar
days after the removal or resignation of the Trustee, the Trustee shall deliver
to Cleveland-Cliffs and, following the Irrevocability Date, to each Trust
Beneficiary, or in the event of a Trust Beneficiary's death or adjudged
incompetence, any agent or representative of the Trust Beneficiary (as to his or
her account), a written account of its administration of the Trust during such
year or during the period from the end of the last preceding year to the date of
such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing


<PAGE>   113
                                                                              16

all cash, securities, rights and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
Such written accounts shall reflect the aggregate of the Trust accounts and
status of each separate account maintained for each Trust Beneficiary. Unless
Cleveland-Cliffs or any Trust Beneficiary shall have filed with the Trustee
written exception or objection to any such statement and account within 90 days
after receipt thereof, Cleveland-Cliffs and the Trust Beneficiary shall be
deemed to have approved such statement and account, and in such case, the
Trustee shall be forever released and discharged with respect to all matters and
things reported in such statement and account as though it had been settled by a
decree of a court of competent jurisdiction in an action or proceeding to which
Cleveland-Cliffs and the Trust Beneficiaries were parties.

                  (b) (i) The Trustee shall maintain a separate subaccount for
each Trust Beneficiary (a "Trust Beneficiary Account") and an account (the
"Master Account") that shall be kept separate from all Trust Beneficiary
Accounts and shall not be identified with any Trust Beneficiary. The Trustee
shall credit or debit each Trust Beneficiary Account and the Master Account as
appropriate to reflect the respective allocable portion of the Trust assets, as
such Trust assets may be adjusted from time to time pursuant to the terms of
this Trust Agreement No. 1. Prior to the date of a Change of Control, all
deposits of principal pursuant to Section 1(a) shall be allocated and



<PAGE>   114
                                                                              17

reallocated as directed by Cleveland-Cliffs. On or after the date of a Change of
Control deposits of principal may be allocated, but not reallocated by
Cleveland-Cliffs. If any deposit of principal is not allocated by the Company,
such amount shall be allocated by the Trustee to the Master Account.

                  (ii) As further described in this Section 7(b)(ii), as of the
beginning of each calendar quarter ending after the Trust has become
irrevocable, the Trustee shall (A) ascertain (or cause to be determined) the
Fully Funded amounts (as defined in Section 4 hereof), (B) allocate the income
of the Trust, (C) determine the amount of all Account Excesses (as hereinafter
defined), and (D) allocate amounts to and from the Master Account. The "Account
Excess" with respect to a Trust Beneficiary Account shall be equal to the
excess, if any, of the fair market value of the assets held in the Trust
allocated to a Trust Beneficiary Account over the respective Fully Funded
amount. The Trustee shall allocate the income of the Trust and all Account
Excesses to the Master Account. The balance in the Master Account shall then be
allocated to any Trust Beneficiary Accounts that are not Fully Funded in
proportion to the differences between the respective Fully Funded amount and the
balance of the Trust Beneficiary Account, insofar as possible, until all Trust
Beneficiary Accounts are Fully Funded.

                  (c) Nothing in this Section 7 shall preclude the commingling
of Trust assets for investment.
<PAGE>   115
                                                                              18

                  8. RESPONSIBILITY OF TRUSTEE. (a) The Trustee shall act with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent corporate trustee, acting in a like capacity and familiar with
such matters, would use in the conduct of an enterprise of a like character and
with like aims; provided, however, that the Trustee shall incur no liability to
any person for any action taken pursuant to a direction, request or approval,
contemplated by and complying with the terms of this Trust Agreement No. 1,
given in writing by Cleveland-Cliffs or by a Trust Beneficiary applicable to his
or her beneficial interest herein; and provided, further, that the Trustee shall
have no duty to seek additional deposits of principal from Cleveland-Cliffs for
additional amounts accrued under the Agreement or the Plan, and the Trustee
shall not be responsible for the adequacy of this Trust.

                  (b) The Trustee may vote any stock or other securities and
exercise any right appurtenant to any stock, other securities or other property
held hereunder, either in person or by general or limited proxy, power of
attorney or other instrument.

                  (c) The Trustee may hold securities in bearer form and may
register securities and other property held in the trust fund in its own name or
in the name of a nominee, combine certificates representing securities with
certificates of the same issue held by the Trustee in other fiduciary
capacities, and deposit, or arrange for deposit of property with any depository;
provided that the books and records of the Trustee shall at all times show 


<PAGE>   116
                                                                              19

that all such securities are part of the trust fund under this Trust Agreement
No. 1.

                  (d) If the Trustee shall undertake or defend any litigation
arising in connection with this Trust Agreement No. 1, it shall be indemnified
by Cleveland-Cliffs against its costs, expenses and liabilities (including
without limitation attorneys' fees and expenses) relating thereto.

                  (e) The Trustee may consult with legal counsel, independent
accountants and actuaries (who may be counsel, independent accountants or
actuaries for Cleveland-Cliffs) with respect to any of its duties or obligations
hereunder, and shall be fully protected in acting or refrain from acting in
accordance with the advice of such counsel, independent accountants and
actuaries.

                  (f) The Trustee may rely and shall be protected in acting or
refraining from acting within the authority granted by the terms of this Trust
Agreement No. 1 upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties.

                  (g) The Trustee may hire agents, accountants, actuaries, and
financial consultants, who may be agents, accountants, actuaries, or financial
consultants, as the case may be, for Cleveland-Cliffs, and shall not be
answerable for the conduct of same if appointed with due care.


<PAGE>   117
                                                                              20

                  (h) The Trustee is empowered to take all actions necessary or
advisable in order to collect any benefits or payments of which the Trustee is
the designated beneficiary.

                  (i) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law unless expressly provided otherwise
herein.

                  9.  AMENDMENTS, ETC., TO AGREEMENTS AND PLAN;
COOPERATION OF CLEVELAND-CLIFFS.

                  (a) Cleveland-Cliffs has previously furnished the Trustee a
complete and correct copy of each Agreement and of the Plan, and
Cleveland-Cliffs shall, and any Trust Beneficiary may, promptly furnish the
Trustee true and correct copies of any amendment, restatement or successor
thereto, whereupon such amendment, restatement or successor shall be
incorporated herein by reference, provided that such amendment, restatement or
successor shall not affect the Trustee's duties and responsibilities hereunder
without the consent of the Trustee.

                  (b) Cleveland-Cliffs shall provide the Trustee with all
information requested by the Trustee for purposes of determining payments to the
Trust Beneficiaries or withholding of taxes as provided in Section 2. Upon the
failure of Cleveland-Cliffs or any Trust Beneficiary to provide any such
information, the Trustee shall, to the extent necessary in the sole judgment of
the Trustee, (i) compute the amount payable hereunder to any Trust Beneficiary;
and (ii) notify Cleveland-Cliffs and the Trust Beneficiary in writing of its
computations. Thereafter this 
<PAGE>   118
                                                                              21

Trust Agreement No. l shall be construed as to the Trustee's duties and
obligations hereunder in accordance with such Trustee determinations without
further action; provided, however, that no such determinations shall in any way
diminish the rights of any Trust Beneficiary hereunder or under any Agreement or
the Plan; and provided, further, that no such determinations shall be deemed to
modify this Trust Agreement No. 1, any Agreement or the Plan. Nothing in this
Trust Agreement No. l shall restrict Cleveland-Cliffs' right to amend, modify or
terminate the Plan.

                  (c) At such times as may in the judgment of Cleveland-Cliffs
be appropriate, Cleveland-Cliffs shall furnish to the Trustee any amendment to
Exhibit A for the purpose of the addition of Trust Beneficiaries to Exhibit A
(or the deletion of Trust Beneficiaries from Exhibit A who have no Benefits
currently due or payable in the future); provided, however, that no such
amendment shall be made after the date of a Change of Control.

                  10. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to receive such reasonable compensation for its services as shall be
agreed upon by Cleveland-Cliffs and the Trustee. The Trustee shall also be
entitled to reimbursement of its reasonable expenses incurred with respect to
the administration of the Trust including fees and expenses incurred pursuant to
Sections 8(d), 8(e) and 8(g) and liabilities to creditors pursuant to court
direction as provided in Section 3(a) hereof. Such compensation and expenses
shall in all events be payable either directly by Cleveland-Cliffs or, in the
event that 


<PAGE>   119
                                                                              22

Cleveland-Cliffs shall refuse, from the assets of the Trust and charged pro rata
in proportion to each separate account balance. The Trust shall have a claim
against Cleveland-Cliffs for any such compensation or expenses so paid.

                  11. REPLACEMENT OF THE TRUSTEE. (a) Prior to the date of a
Change of Control, the Trustee may be removed by Cleveland-Cliffs. On or after
the date of a Change of Control, the Trustee may be removed at any time by
agreement of Cleveland-Cliffs and a majority of the Trust Beneficiaries. The
Trustee may resign after providing not less than 90 days' notice to
Cleveland-Cliffs and to the Trust Beneficiaries. In case of removal or
resignation, a new trustee, which shall be independent and not subject to
control of either Cleveland-Cliffs or the Trust Beneficiaries, shall be
appointed as shall be agreed by Cleveland-Cliffs and a majority of the Trust
Beneficiaries. No such removal or resignation shall become effective until the
acceptance of the Trust by a successor trustee designated in accordance with
this Section 11. If the Trustee should resign, and within 45 days of the notice
of such resignation, Cleveland-Cliffs and the Executives shall not have notified
the Trustee of an agreement as to a replacement trustee, the Trustee shall
appoint a successor trustee, which shall be a bank or trust company, wherever
located, having a capital and surplus of at least $500,000,000 in the aggregate.

                  (b)  For purposes of the removal or appointment of a
Trustee under this Section 11, (i) if any Trust Beneficiary shall 


<PAGE>   120

                                                                              23

be deceased or adjudged incompetent, such Trust Beneficiary's personal
representative (including his or her guardian, executor or administrator) shall
participate in such Trust Beneficiary's stead, and (ii) a Trust Beneficiary
shall not participate if all payments of Benefits then currently due or payable
in the future have been made to such Trust Beneficiary.

                  12.  AMENDMENT OR TERMINATION.  (a) This Trust Agreement No. 
1 may be amended by Cleveland-Cliffs and the Trustee without the consent of any
Trust Beneficiary provided the amendment does not adversely affect any Trust
Beneficiary. This Trust Agreement No. 1 may also be amended at any time and to
any extent by a written instrument executed by the Trustee, Cleveland-Cliffs and
the Trust Beneficiaries, except to alter Section 12(b), and except that
amendments to Exhibit A contemplated by Section 9(c) hereof shall be made as
therein provided.

                  (b) The Trust shall terminate on the date on which the Trust
no longer contains any assets, or, if earlier, the date on which each Trust
Beneficiary is entitled to no further payments hereunder.

                  (c) Upon termination of the Trust as provided in Section 12(b)
hereof, any assets remaining in the Trust shall be returned to Cleveland-Cliffs
or as it directs.

                  13.  SPECIAL DISTRIBUTION.  (a) It is intended that (i)
the creation of, and transfer of assets to, the Trust will not cause any
Agreement or the Plan to be other than "unfunded" for 


<PAGE>   121
                                                                              24

purposes of title I of ERISA; (ii) transfers of assets to the Trust will not be
transfers of property for purposes of section 83 of the Code, or any successor
provision thereto, nor will such transfers cause a currently taxable benefit to
be realized by a Trust Beneficiary pursuant to the "economic benefit" doctrine;
and (iii) pursuant to section 451 of the Code, or any successor provision
thereto, amounts will be includable as compensation in the gross income of a
Trust Beneficiary in the taxable year or years in which such amounts are
actually distributed or made available to such Trust Beneficiary by the Trustee.

                  (b) Notwithstanding anything to the contrary contained in this
Trust Agreement No. 1, in the event it is determined by a final decision of the
Internal Revenue Service, or, if an appeal is taken therefrom, by a court of
competent jurisdiction that (i) by reason of the creation of, and a transfer of
assets to the Trust, the Trust is considered "funded" for purposes of title I of
ERISA; or (ii) a transfer of assets to the Trust is considered a transfer of
property for purposes of section 83 of the Code or any successor provision
thereto; or (iii) a transfer of assets to the Trust causes a Trust Beneficiary
to realize income pursuant to the "economic benefit" doctrine; or (iv) pursuant
to section 451 of the Code or any successor provision thereto, amounts are
includable as compensation in the gross income of a Trust Beneficiary in a
taxable year that is prior to the taxable year or years in which such amounts
would, but for this Section 13, otherwise actually be distributed or made
available to such Trust 


<PAGE>   122
                                                                              25

Beneficiary by the Trustee, then (A) the assets held in Trust shall be allocated
in accordance with Section 7(b) hereof, and (B) promptly after the next
quarterly allocation and reallocation pursuant to Section 7(b) hereof, the
Trustee shall distribute to each affected Trust Beneficiary an amount equal to
the lesser of (i) the amount which, after taking into account the federal, state
and local income tax consequences of the special distribution itself, is equal
to the sum of any federal, state and local income taxes, interest due thereon,
and penalties assessed with respect thereto, which are attributable to amounts
that are includable in the income of such Trust Beneficiary, or (ii) the balance
of the Trust Beneficiary Account corresponding to such amount.

                  14.  SEVERABILITY, ALIENATION, ETC.  (a) Any provision of 
this Trust Agreement No. 1 prohibited by law shall be ineffective to the extent
of any such prohibition without invalidating the remaining provisions hereof.

                  (b) To the extent permitted by law, Benefits to Trust
Beneficiaries under this Trust Agreement No. l may not be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process and no benefit provided for
herein and actually paid to any Trust Beneficiary by the Trustee shall be
subject to any claim for repayment by Cleveland-Cliffs or Trustee.


<PAGE>   123
                                                                              26

                  (c)  This Trust Agreement No. 1 shall be governed by
and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of conflict of laws thereof.

                  (d)  This Trust Agreement No. l may be executed in two
or more counterparts, each of which shall be considered an original agreement.
This Trust Agreement No. 1 shall become effective immediately upon the execution
by Cleveland-Cliffs of at least one counterpart, it being understood that all
parties need not sign the same counterpart, but shall not bind any Trustee until
such Trustee has executed at least one counterpart.

                  15.  NOTICES; IDENTIFICATION OF CERTAIN TRUST BENEFICIARIES.
(a) All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly given when received: 

                           If to the Trustee, to:

                           KeyTrust Company of Ohio, N.A.
                           127 Public Square
                           Cleveland, Ohio 44114-1306

                           Attention:  Trust Counsel

                           If to Cleveland-Cliffs, to:

                           Cleveland-Cliffs Inc.
                           1100 Superior Avenue
                           Cleveland, Ohio  44114

                           Attention:  Secretary

                           If to the Trust Beneficiaries, to the addresses
                           listed on Exhibit A hereto

provided, however, that if any party or any Trust Beneficiary or
his or its successors shall have designated a different address 


<PAGE>   124
                                                                              27

by written notice to the other parties, then to the last address so designated.

                  (b) Cleveland-Cliffs shall provide the Trustee with the names
of any beneficiary or beneficiaries designated by the Executives (and who are,
therefore, Trust Beneficiaries hereunder).

                  IN WITNESS WHEREOF, Cleveland-Cliffs and the Trustee have
caused counterparts of this Trust Agreement No. 1 (Amended and Restated
Effective June 1, 1997) to be executed on their behalf on June 12, 1997, each of
which shall be an original agreement.


                                        CLEVELAND-CLIFFS INC            
                                                                        
                                        By /s/ R.F. Novak             
                                          ------------------------------------
                                          Its V.P. - H.R.
                                             ----------------------------------

                                        KEYTRUST COMPANY OF OHIO, N.A., 
                                        as Trustee                      
                                                                        
                                        By Kelley Clark                 
                                          -------------------------------------
                                          Its Vice President            
                                             ----------------------------------

                                        and                             

                                        By J.A. Radazzo                 
                                          -------------------------------------
                                          Its V.P.                      
                                              ---------------------------------

<PAGE>   125



                                                                    Exhibit A
                                                                    ---------

Executive                 Title                            Trust Beneficiary
---------                 -----                            -----------------

M. Thomas Moore           Chairman and Chief               M. T. Moore Family
                          Executive Officer                  Trust
                                                           The M. Thomas Moore
                                                             Family Trust
                                                           Dated 11/29/85

                                                           Co-Trustees are:
                                                           Robert Bouhall and
                                                           William E. Reichard
                                                           of the Firm of
                                                           Conway, Patton,
                                                           Bouhall and Reichard
                                                           1220 Huntington
                                                           Building
                                                           Cleveland, OH  44115

John S. Brinzo            Executive Vice                   Marlene J. Brinzo
                          President-Finance                (wife)

William R. Calfee         Executive Vice                   Society National
                          President-                       Bank, or its
                          Commercial                       successor, as Trustee
                                                           under the William R.
                                                           Calfee
                                                           Revocable Trust
                                                           Agreement dated
                                                           5/9/89, as the same
                                                           may hereafter be
                                                           amended,
                                                           800 Superior Ave.,
                                                           Cleveland, OH  44114

Thomas J. O'Neill         Executive Vice
                          President - Operations



<PAGE>   126



                                                                       EXHIBIT B
                                                                       ---------

                  "Change of Control" shall be deemed to have occurred if

                  (i) Cleveland-Cliffs shall merge into itself, or be
         merged or consolidated with, another corporation and as a result of
         such merger or consolidation less than 70% of the outstanding voting
         securities of the surviving or resulting corporation shall be owned in
         the aggregate by the former shareholders of Cleveland-Cliffs as the
         same shall have existed immediately prior to such merger or
         consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) a person, within the meaning of Section 3(a)(9) or of
         Section 13(d)(3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of Cleveland-Cliffs (whether directly or indirectly);
         or

                  (iv) during any period of three consecutive years,
         individuals who at the beginning of any such period


<PAGE>   127
                                                                               2

       constitute the Board of Directors of Cleveland-Cliffs cease, for any
       reason, to constitute at least a majority thereof, unless the election,
       or the nomination for election by the shareholders of Cleveland-Cliffs,
       of each Director first elected during any such period was approved by a
       vote of at least one-third of the Directors of Cleveland-Cliffs who are
       Directors of Cleveland-Cliffs on the date of the beginning of any such
       period.


<PAGE>   128


                                                                  Exhibit C

                              TRUST AGREEMENT NO. 2
                  (Amended and Restated Effective June 1, 1997)
                  ---------------------------------------------

                  This Trust Agreement No. 2 (Amended and Restated Effective 
June 1, 1997) ("Trust Agreement No. 2") is made on this 12th day of June, 1997, 
by and between Cleveland-Cliffs Inc, an Ohio corporation ("Cleveland-Cliffs"), 
and KeyTrust Company of Ohio, N.A., a national banking association, as trustee 
(the "Trustee").

                                   WITNESSETH:
                                   ----------

                  WHEREAS, under the provisions of certain agreements between
each of the executives of Cleveland-Cliffs (the "Executives") listed (from time
to time as provided in Section 9(c) hereof) on Exhibit A hereto and
Cleveland-Cliffs (the "Executive Agreements"), as each of the same may hereafter
be amended or restated, or any successor thereto, the Executives may become
entitled to certain compensation, pension and other benefits;

                  WHEREAS, under the provisions of the Severance Pay Plan for
Key Employees of Cleveland-Cliffs Inc (the "Severance Plan"), effective February
1, 1992, as the same may be supplemented, amended, or restated, or any successor
thereto, certain key employees (the "Key Employees") also listed (from time to
time as provided in Section 9(c) hereof) on Exhibit A hereto, may become
entitled to compensation, pension and other benefits;

                  WHEREAS, under the provisions of the Cleveland-Cliffs Inc
Retention Plan for Salaried Employees (the "Retention Plan"),



<PAGE>   129


                                                                               2

adopted January 14, 1992, as the same may be supplemented, amended, or restated,
or any successor thereto, certain salaried employees identified therein (the
"Covered Employees") may become entitled to compensation and other benefits;

                  WHEREAS, in addition to the compensation, pension and other
benefits provided by the Executive Agreements, the Severance Plan and the
Retention Plan, in order to ensure that the obligations of Cleveland-Cliffs
under the Executive Agreements, the Severance Plan and the Retention Plan can be
enforced by the Executives, the Key Employees, and the Covered Employees,
respectively, (referred to herein singularly as an "Indemnitee" and collectively
as the "Indemnitees") in the event of a "Change of Control" (as defined herein),
the Executive Agreements, the Severance Plan and the Retention Plan all provide
that Cleveland-Cliffs will establish a trust to fund reasonable attorneys' and
related fees and expenses associated with a lawsuit, action or other proceeding
brought by or on behalf of an Indemnitee to enforce provisions of an Executive
Agreement (referred to collectively herein as "Expenses");

                  WHEREAS, the Executive Agreements, the Severance Plan and the
Retention Plan all provide that the foregoing trust arrangement will be
considered a part of the Executive Agreements, the Severance Plan and the
Retention Plan, and will set forth the terms and conditions relating to the
payment of Expenses;



<PAGE>   130


                                                                               3

                  WHEREAS, Cleveland-Cliffs and Ameritrust Company National
Association, a predecessor of the Trustee, entered into a trust agreement
("Trust Agreement No. 2"), dated October 28, 1987, to provide for the payment of
reasonable attorneys' and related fees and expenses incurred by certain
executives in the enforcement of their rights under agreements between such
executives and Cleveland-Cliffs in effect at that time;

                  WHEREAS, Trust Agreement No. 2 was amended and restated
by an Amended and Restated Trust Agreement No. 2, dated March 24,
1992; and

                  WHEREAS, Cleveland-Cliffs desires to amend and restate this
Trust Agreement No. 2 heretofore entered into and has transferred or will
transfer to the trust (the "Trust") established by this Trust Agreement No. 2
assets which shall be held therein until paid to Indemnitees with respect to
Expenses in such manner and at such times as specified herein.

                  NOW, THEREFORE, the parties amend and restate the Trust
Agreement No. 2 and agree that the Trust shall be comprised, held and disposed
of as follows:

                  1.  TRUST FUND.  (a) Cleveland-Cliffs hereby deposits
with the Trustee in trust Ten Dollars ($10.00), which shall become the principal
of this Trust, to be held, administered and disposed of by the Trustee as herein
provided.

                  (b) The Trust hereby established shall be revocable by
Cleveland-Cliffs at any time prior to the date on which occurs a "Change of
Control," as that term is defined in this Section



<PAGE>   131


                                                                               4

1(b); on or after such date, this Trust shall be irrevocable. Cleveland-Cliffs
shall notify the Trustee promptly in the event that a Change of Control has
occurred. The term "Change of Control" shall mean the occurrence of any of the
following events:

                  (i) Cleveland-Cliffs shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of Cleveland-Cliffs as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) Cleveland-Cliffs shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of Cleveland-Cliffs as the same shall have existed
         immediately prior to such sale or transfer;

                  (iii) a person, within the meaning of Section 3(a)(9) or of
         Section 13(d)(3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities Exchange Act of 1934) of 30% or more of the outstanding
         voting



<PAGE>   132


                                                                               5

         securities of Cleveland-Cliffs (whether directly or indirectly); or

                  (iv) during any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of Cleveland-Cliffs cease, for any reason, to constitute at
         least a majority thereof, unless the election, or the nomination for
         election by the shareholders of Cleveland-Cliffs, of each Director
         first elected during any such period was approved by a vote of at least
         one-third of the Directors of Cleveland-Cliffs who are Directors of
         Cleveland-Cliffs on the date of the beginning of any such period.

                  (c) The principal of the Trust and any earnings thereon shall
be held in trust separate and apart from other funds of Cleveland-Cliffs
exclusively for the uses and purposes herein set forth. No Indemnitee shall have
any preferred claim on, or any beneficial ownership interest in, any assets of
the Trust prior to the time that such assets are paid to an Indemnitee as
Expenses as provided herein.

                  (d) Any Company (as defined in paragraph (e) below) may at any
time or from time to time make additional deposits of cash or other property in
the Trust to augment the principal to be held, administered and disposed of by
the Trustee as herein provided, but no payments of all or any portion of the
principal of the Trust or earnings thereon shall be made to Cleveland- 



<PAGE>   133
                                                                               6

Cliffs or any other person or entity on behalf of Cleveland-Cliffs except as
herein expressly provided.

                  (e) The term "Company" as used herein shall mean
Cleveland-Cliffs, any wholly owned subsidiary or any partnership or joint
venture in which Cleveland-Cliffs and/or any wholly-owned subsidiary is a
partner or venturer and Empire Iron Mining Partnership, or any entity that is a
successor to Cleveland- Cliffs in ownership of substantially all of its assets.

                  (f)  This Trust Agreement No. 2 shall be construed as a
part of the Executive Agreements, the Severance Plan and the

Retention Plan.

                  (g) This Trust is intended to be a grantor trust, within the
meaning of Section 671 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision thereto, and shall be construed accordingly.
The Trust is not designed to qualify under Section 401(a) of the Code or to be
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").

                  2. PAYMENTS TO INDEMNITEES. (a) The Trustee shall promptly pay
Expenses to the Indemnitees from the assets of the Trust in accordance with
Section 13 of the Executive Agreements, Section 12 of the Severance Plan,
Article IX of the Retention Plan and this Section 2, provided that (i) this
Trust Agreement No. 2 has not been terminated pursuant to Section 12 hereof;
(ii) the Trust has become irrevocable; (iii) with respect to the first demand
for payment of Expenses hereunder received by the Trustee,


<PAGE>   134


                                                                               7

the Trustee shall immediately give appropriate notice thereof to all
Indemnitees, and shall make no payment of Expenses until the 21st day after such
notice has been given; and (iv) the requirements of Section 2(c) and 2(d) hereof
have been satisfied. The Trustee shall promptly inform the Company as to amounts
paid to any Indemnitee pursuant to this Section.

                  (b) It is the intention of Cleveland-Cliffs that during the
21-day period prescribed by Section 2(a) (iii) hereof, the Indemnitees will make
reasonable efforts to consult with each other and to take into account the
interests of all Indemnitees in deciding on how best to proceed to enforce the
provisions of the Executive Agreements, the Severance Plan, and/or the Retention
Plan such that the assets of the Trust are utilized most effectively; provided,
however, that this Section 2(b) is to be construed as precatory in nature, and
in the absence of any other agreement or arrangement, this Trust Agreement No. 2
(without regard to this Section 2(b)) shall apply to the payment of Expenses.

                  (c) A demand for payment by an Indemnitee hereunder must be
made within two months of the date on which the Indemnitee receives a bill,
invoice or other statement setting forth the Expenses that have been incurred.
In order to demand payment hereunder, the Indemnitee must deliver to the Trustee
(i) a certificate signed by or on behalf of such Indemnitee, certifying to the
Trustee that the Company is in default in paying the Indemnitee a specified
amount which the Indemnitee



<PAGE>   135


                                                                               8

states to be owed under an Executive Agreement, the Severance Plan or the
Retention Plan, and (ii) a notice in writing and in reasonable detail of the
Expenses that are to be paid hereunder.

                  (d) To the extent payments hereunder may be made only from
funds held in the form of a deposit or obligation, such payments may be
postponed until such deposit or obligation shall have matured. Payments shall be
made to the Indemnitee in the full amount noticed until the Trust is depleted;
provided that if on the date such amount is to be paid from the Trust other
amounts have been claimed but not yet paid to the same or other Indemnitees and
the aggregate amount so claimed exceeds the amount available in the Trust, the
Trustee shall only pay that portion of the amount then payable to each such
Indemnitee determined by multiplying such amount by a fraction, the numerator of
which is the amount then in the Trust and the denominator of which is the
aggregate amount noticed by the Indemnitees to be owed but not yet paid to that
date.

                  3.  RIGHTS OF INDEMNITEES.  (a) Nothing in this Trust
Agreement No. 2 shall in any way diminish any rights of any Indemnitee to pursue
his rights as a general creditor of the Company with respect to Expenses or
otherwise, and (b) the rights of the Indemnitees under the Executive Agreements,
Severance Plan or Retention Plan shall in no way be affected or diminished by
any provision of this Trust Agreement No. 2 or action taken pursuant to this
Trust Agreement No. 2, it being the intent of Cleveland-Cliffs that rights of
the Indemnitees be security for



<PAGE>   136


                                                                               9

obligations of the Company under the Executive Agreements, Severance Plan or
Retention Plan, except that any payment actually received by any Indemnitee
hereunder shall reduce dollar-per-dollar amounts otherwise due to such
Indemnitee pursuant to Section 13 of the Executive Agreements, Section 12 of the
Severance Plan, or Article IX of the Retention Plan, as applicable.

                  4. PAYMENTS TO CLEVELAND-CLIFFS. Except to the extent
expressly contemplated by Section 1(b), Cleveland-Cliffs shall have no right or
power to direct the Trustee to return any of the Trust assets to
Cleveland-Cliffs before all payments of Expenses have been made to all
Indemnitees as herein provided.

                  5. INVESTMENT OF TRUST FUND. The Trustee shall invest the
principal of the Trust including any income accumulated and added to principal
in (a) interest-bearing deposit accounts or certificates of deposit (including
any such accounts or certificates issued or offered by the Trustee or any
successor or affiliated corporation but excluding obligations of the Company),
(b) direct obligations of the United States of America, or obligations the
payment of which is guaranteed, as to both principal and interest, by the
government or an agency of the government of the United States of America, or
(c) one or more mutual funds or commingled funds, whether or not maintained by
the Trustee, substantially all of the assets of which is invested in obligations
the income from which is not subject to taxation; provided, however, that no
such investment may mature more than



<PAGE>   137


                                                                              10

90 days after the date of purchase.  Nothing in this Trust
Agreement No. 2 shall preclude the commingling of Trust assets
for investment.  The Trustee shall not be required to invest
nominal amounts.

                  6.  INCOME OF THE TRUST.  During the continuance of
this Trust all net income of the Trust shall be retained in the
Trust.

                  7. ACCOUNTING BY TRUSTEE. The Trustee shall keep records in
reasonable detail of all investments, receipts, disbursements and all other
transactions required to be done, including such specific records as shall be
agreed upon in writing by Cleveland-Cliffs and the Trustee. All such accounts,
books and records shall be open to inspection and audit at all reasonable times
by Cleveland-Cliffs, by any Indemnitee or by any agent or representative of any
of the foregoing. Within 60 calendar days following the end of each calendar
year and within 60 calendar days after the removal or resignation of the
Trustee, the Trustee shall deliver to Cleveland-Cliffs and, if such year end,
removal or resignation occurs on or after the date on which a Change of Control
has occurred, to each Indemnitee a written account of its administration of the
Trust during such year or during the period from the end of the last preceding
year to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions affected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of



<PAGE>   138


                                                                              11

such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities, rights and other property held in
the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be. The Trustee shall furnish to Cleveland-Cliffs
on a quarterly basis (or as Cleveland-Cliffs shall direct from time to time) and
in a timely manner such information regarding the Trust as Cleveland-Cliffs
shall require for purposes of preparing its statements of financial condition.
Unless Cleveland-Cliffs or any Indemnitee shall have filed with the Trustee
written exception or objection to any such statement and account within 90 days
after receipt thereof, Cleveland-Cliffs or the Indemnitee shall be deemed to
have approved such statement and account, and in such case the Trustee shall be
forever released and discharged with respect to all matters and things reported
in such statement and account as though it had been settled by a decree of a
court of competent jurisdiction in an action or proceeding to which
Cleveland-Cliffs and the Indemnitees were parties.

                  8. RESPONSIBILITY OF TRUSTEE. (a) The Trustee shall act with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent corporate trustee, acting in like capacity and familiar with such
matters, would use in the conduct of an enterprise of a like character and with
like aims; provided, however, that the Trustee shall incur no liability to any
person for any action taken pursuant to a direction, request or approval which
is contemplated by and in



<PAGE>   139


                                                                              12

conformity and compliance with the terms of this Trust Agreement No. 2, the
Executive Agreements, the Severance Plan and the Retention Plan, and is given in
writing by Cleveland-Cliffs or by an Indemnitee with respect to his beneficial
interest herein; and provided, further, that the Trustee shall have no duty to
seek additional deposits of principal from Cleveland-Cliffs, and the Trustee
shall not be responsible for the adequacy of this Trust.

                  (b) The Trustee shall not be required to undertake or to
defend any litigation arising in connection with this Trust Agreement No. 2
unless it be first indemnified by Cleveland-Cliffs against its prospective
costs, expenses, and liabilities (including without limitation attorneys' fees
and expenses) relating thereto, and Cleveland-Cliffs hereby agrees to indemnify
the Trustee and to be primarily liable for such costs, expenses and liabilities.

                  (c) The Trustee may consult with legal counsel (which, after a
Change of Control, shall be independent with respect to the Company) with
respect to any of its duties or obligations hereunder, and shall be fully
protected in acting or refraining from acting in accordance with the advice of
such counsel.

                  (d) The Trustee may rely and shall be protected in acting or
refraining from acting within the authority granted by the terms of this Trust
Agreement No. 2 upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties, including, without limiting the scope of



<PAGE>   140


                                                                              13

this Section 8(d), (i) the notice of a Change of Control required by Section
1(b) hereof, and (ii) the certification and notice required by Section 2(c)
hereof.

                  (e) The Trustee may hire agents, accountants and financial
consultants, who may be agent, accountant, or financial consultant, as the case
may be, for the Company, and shall not be answerable for the conduct of same if
appointed with due care.

                  (f) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law unless expressly provided otherwise
herein.

                  (g) The Trustee is empowered to take all actions necessary or
advisable in order to collect any benefits or payment of which the Trustee is
the designated beneficiary.

                  9. AMENDMENTS, ETC. TO EXECUTIVE AGREEMENTS, THE SEVERANCE
PLAN AND THE RETENTION PLAN; COOPERATION OF CLEVELAND- CLIFFS. (a)
Cleveland-Cliffs has previously furnished the Trustee a complete and correct
copy of each Executive Agreement, the Severance Plan and the Retention Plan. Any
Indemnitee may, and Cleveland-Cliffs shall, provide the Trustee with true and
correct copies of any amendment, restatement or successor to any Executive
Agreement, the Severance Plan and the Retention Plan, whereupon such amendment,
restatement or successor shall be incorporated herein by reference, provided
that such amendment, restatement or successor shall not affect the Trustee's
duties and responsibilities hereunder without the consent of the Trustee.



<PAGE>   141


                                                                              14

                  (b) Cleveland-Cliffs shall provide the Trustee with all
information requested by the Trustee for purposes of determining payments to the
Indemnitees as provided in Section 2. Upon the failure of Cleveland-Cliffs or
any Indemnitee to provide any such information requested by the Trustee for
purposes of determining payments to the Indemnitees as provided in Section 2,
the Trustee shall, to the extent necessary in the sole judgment of the Trustee,
(i) compute the amount payable hereunder to any Indemnitee; and (ii) notify
Cleveland-Cliffs and the Indemnitee in writing of its computations. Thereafter
this Trust Agreement No. 2 shall be construed as to the Trustee's duties and
obligation hereunder in accordance with such Trustee determinations without
further action; provided, however, that no such determinations shall in any way
diminish the rights of the Indemnitees hereunder or under the Executive
Agreements, Severance Plan or Retention Plan, and provided, further, that no
such determination shall be deemed to modify this Trust Agreement No. 2 or any
Executive Agreement, the Severance Plan, or the Retention Plan.

                  (c) At such times as may in the judgment of Cleveland-Cliffs
be appropriate, Cleveland-Cliffs shall furnish to the Trustee any amendment to
Exhibit A for the purpose of the addition of Indemnitees to Exhibit A (or the
deletion of Indemnitees from Exhibit A who are not currently and shall not in
the future be entitled to Expenses); provided, however, that no such amendment
shall be made after the date of a Change of



<PAGE>   142


                                                                              15

Control, other than to designate a different address pursuant to Section 14
hereof.

                  10. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to receive such reasonable compensation for its services as shall be
agreed upon by Cleveland-Cliffs and the Trustee. The Trustee shall also be
entitled to reimbursement of its reasonable expenses incurred with respect to
the administration of the Trust including fees and expenses incurred pursuant to
Sections 8(c) and 8(e) hereof. Such compensation and expenses shall in all
events be payable either directly by Cleveland-Cliffs or, in the event that
Cleveland-Cliffs shall refuse, from the assets of the Trust. The Trust shall
have a claim against Cleveland-Cliffs for any such compensation or expenses so
paid.

                  11. REPLACEMENT OF THE TRUSTEE. (a) The Trustee may resign
after providing not less than 90 days' notice to Cleveland-Cliffs and, on or
after the date on which a Change of Control has occurred, to the Indemnitees.
Prior to the date on which a Change of Control has occurred, the Trustee may be
removed at any time by Cleveland-Cliffs. On or after such date, such removal
shall also require the agreement of a majority of the Indemnitees. Prior to the
date on which a Change of Control has occurred, a replacement or successor
trustee shall be appointed by Cleveland-Cliffs. On or after such date, such
appointment shall also require the agreement of a majority of the Indemnitees.
No such removal or resignation shall become



<PAGE>   143


                                                                              16

effective until the acceptance of the trust by a successor trustee designated in
accordance with this Section 11. If the Trustee should resign, and within 45
days of the notice of such resignation Cleveland-Cliffs and a majority of the
Indemnitees (if required) shall not have notified the Trustee of an agreement as
to a replacement trustee, the Trustee shall appoint a successor trustee, which
shall be a bank or trust company, wherever located, having a capital and surplus
of at least $500,000,000 in the aggregate. Notwithstanding the foregoing, a new
trustee shall be independent and not subject to control of either
Cleveland-Cliffs or the Indemnitees. Upon the acceptance of the trust by a
successor trustee, the Trustee shall release all of the monies and other
property in the Trust to its successor, who shall thereafter for all purposes of
this Trust Agreement No. 2 be considered to be the "Trustee."

                  (b) For purposes of the removal or appointment of a trustee
under this Section 11, if any Indemnitee shall be deceased or adjudged
incompetent, such Indemnitee's personal representative (including his or her
guardian, executor or administrator) shall participate in such Indemnitee's
stead.

                  12.  AMENDMENT OR TERMINATION.  (a) This Trust Agreement 
No. 2 may be amended at any time and to any extent by a written instrument
executed by the Trustee, Cleveland-Cliffs and, on or after the date on which a
Change of Control has occurred, a majority of the Indemnitees, except to make
the Trust revocable after it has become irrevocable in accordance with Section
1(b)



<PAGE>   144


                                                                              17

hereof, or to alter Section 12(b) hereof, except that amendments contemplated by
Section 9 hereof shall be made as therein provided.

                  (b) The Trust shall terminate upon the earliest of (i) the
tenth anniversary of the date on which a Change of Control has occurred; (ii)
the third anniversary of the date on which a Change of Control has occurred,
provided that the Trustee has received no demand for payment of Expenses prior
to such anniversary; (iii) such time as the Trust no longer contains any assets;
(iv) such time as the Trustee shall have received consents from all Indemnitees
to the termination of this Trust Agreement No. 2; or (v) there is no longer any
living Indemnitee under this Trust Agreement No. 2 and there is no pending
demand by the estate of any Indemnitee against the Trust.

                  (c) Upon termination of the Trust as provided in Section 12(b)
hereof, any assets remaining in the Trust shall be returned to Cleveland-Cliffs
unless a determination is made by legal counsel experienced in such matters that
the assets of the Trust may not be returned to Cleveland-Cliffs without
violating Section 403(d) (2) of ERISA, or any successor provision thereto. If
such a determination is made, any assets remaining in the Trust, after
satisfaction of liabilities hereunder, pursuant to the written direction of
Cleveland-Cliffs, shall be (i) distributed to any welfare benefit plan (within
the meaning of ERISA) maintained by Cleveland-Cliffs at the time of distribution
so established at such time in order to receive such assets from



<PAGE>   145


                                                                              18

this Trust, or (ii) otherwise applied to provide benefits which may be provided
by a welfare benefit plan (within the meaning of ERISA), directly or through the
purchase of insurance.

                  13.  SEVERABILITY, ALIENATION, ETC.  (a) Any provision
of this Trust Agreement No. 2 prohibited by law shall be ineffective to the
extent of any such prohibition without invalidating the remaining provisions
hereof.

                  (b) To the extent permitted by law, benefits to Indemnitees
under this Trust Agreement No. 2 may not be anticipated (except as herein
expressly provided), assigned (either at law or in equity), alienated or subject
to attachment, garnishment, levy, execution or other legal or equitable process.
No benefit actually paid to any Indemnitee by the Trustee shall be subject to
any claim for repayment by the Company or Trustee, except in the event of (i) a
false claim, or (ii) a payment is made to an incorrect Indemnitee.

                  (c)  This Trust Agreement No. 2 shall be governed by
and construed in accordance with the laws of the State of Ohio, without giving
effect to the principles of conflict of laws thereof.

                  (d)  This Trust Agreement No. 2 may be executed in two
or more counterparts, each of which shall be considered an original agreement.
This Trust Agreement No. 2 shall become effective immediately upon the execution
by Cleveland-Cliffs of at least one counterpart, it being understood that all
parties



<PAGE>   146


                                                                             19

need not sign the same counterpart, but shall not bind any Trustee until such
Trustee has executed at least one counterpart.

                  14.  NOTICES.  All notices, requests, consents and
other communications hereunder shall be in writing and shall be
deemed to have been duly given when received:

                  If to the Trustee, to:
                  ----------------------

                  KeyTrust Company of Ohio, N.A.
                  127 Public Square
                  Cleveland, Ohio 44114-1306

                  Attention:  Trust Counsel

                  If to Cleveland-Cliffs, to:
                  ---------------------------

                  Cleveland-Cliffs Inc
                  1100 Superior Avenue
                  Cleveland, Ohio 44114

                  Attention:        Secretary

                  If to an Indemnitee, to:
                  ------------------------

                  His or her last address shown on
                  the records of the Company

provided, however, that if any party or his or its successors shall have
designated a different address by notice to the other parties, then to the last
address so designated.



<PAGE>   147


                                                                              20

                  IN WITNESS WHEREOF, each of Cleveland-Cliffs and the Trustee
have caused counterparts of this Trust Agreement No. 2 (Amended and Restated
effective June 1, 1997) to be executed on their behalf on June 12, 1997, each of
which shall be an original agreement.

                                              CLEVELAND-CLIFFS INC

                                              By: /s/ R. F. Novak
                                                 ------------------------------
                                                 Its: V.P. - H.R.
                                                     --------------------------

                                              KEYTRUST COMPANY OF OHIO, N.A.,
                                              as Trustee

                                              By: Kelley Clark
                                                 ------------------------------
                                                 Its: Vice President
                                                     --------------------------
                                              and

                                              By:  J.A. Radazzo
                                                 ------------------------------
                                                 Its: VP
                                                     --------------------------
<PAGE>   148


                                                                Exhibit A
                                                                ---------
Executives
----------

       Name                                    Title
-----------------------         ------------------------------------------

M. T. Moore                     Chairman and Chief Executive Officer
J. S. Brinzo                    Executive Vice President-Finance and Planning
W. R. Calfee                    Executive Vice President-Commercial
T. J. O'Neil                    Executive Vice President-Operations


Key Employees
-------------

       Name                                    Title
------------------------        ------------------------------------------
J. W. Sanders                   Senior Vice President-International Development
A. S. West                      Senior Vice President-Sales
C. B. Bezik                     Vice President and Treasurer
G. N. Chandler                  Vice President-Reduced Iron
R. Emmet                        Vice President and Controller
F. L. Hartman                   Vice President and General Counsel
R. F. Novak                     Vice President-Human Resources
J. A. Trethewey                 Vice President-Operations Services
J. E. Lenhard                   Secretary and Assistant General Counsel
R. C. Berglund                  General Manager-Northshore Mine
L. G. Dykers                    General Manager-Hibbing Taconite 
D. Lebel                        General Manager-Wabush Mines
M. P. Mlinar                     General Manager-Tilden Mine
T. S. Petersen                  General Manager-Empire Mine
J. N. Tuomi                     General Manager-LTV Steel Mining Company
R. W. von Bitter                General Manager-Cliffs Reduced Iron Corp.
<PAGE>   149
                                                                       Exhibit D

                              TRUST AGREEMENT NO. 7
                              ---------------------

           This Trust Agreement ("Trust Agreement No. 7") made this 9th day of
April, 1991 by and between Cleveland-Cliffs Inc, an Ohio corporation
("Cleveland-Cliffs"), and Ameritrust Company National Association, a national
banking association (the "Trustee");

                                   WITNESSETH:
                                   -----------
               WHEREAS, certain benefits are or may become payable under the
provisions of the Cleveland-Cliffs Inc Supplemental Retirement Benefit Plan, as
Amended and Restated Effective January 1, 1991 as the same may hereafter be
supplemented, amended or restated, or any successor thereto (the "Plan"), a
current copy of which is attached hereto as Exhibit B and incorporated herein by
reference, to the participants in the Plan (the "Participants") listed (from
time to time as provided in Section 9(b) hereof) on Exhibit A hereto or to the
beneficiaries of such Participants (the "Beneficiaries") as the case may be;
               WHEREAS, the Plan provides for the payment of benefits resulting 
from contributions made to the Plan which would have been made for the
Participants to the qualified retirement plans established by Cleveland-Cliffs
and its subsidiary corporations and affiliates were it not for certain
limitations imposed by the Internal Revenue Code of 1986, as amended
(the"Code"), and the Plan also provides for the payment of benefits due under
agreements entered into by Cleveland-Cliffs (and which may be entered into in
the future by Cleveland-Cliffs and its subsidiary corporations and affiliates)
with certain executives providing for

<PAGE>   150

additional service credit and/or other features for purposes of computing
retirement benefits;
               WHEREAS, Cleveland-Cliffs wishes specifically to assure the
payment to the Participants and Beneficiaries of amounts due under the Plan (the
amounts so payable being collectively referred to herein as the "Benefits");
               WHEREAS, subject to Section 9 hereof, the amounts and timing of
Benefits to which each Participant or Beneficiary is presently or may become
entitled are as provided in the Plan;
               WHEREAS, Cleveland-Cliffs wishes to establish a trust (the
"Trust") under which Cleveland-Cliffs and each of its subsidiaries or affiliates
that executes a Participating Subsidiary Deposit Agreement ("Deposit Agreement")
as provided in Section 14 hereof (a "Participating Subsidiary"; and
"Participating Employer" shall mean Cleveland-Cliffs or any Participating
Subsidiary) may transfer to the Trust assets which shall be held therein subject
to the claims of the creditors of each Participating Employer to the extent set
forth in Section 3 hereof until paid in full to all Participants and
Beneficiaries as Benefits in such manner and at such times as specified herein
unless the Participating Employer with respect to the Participant or Beneficiary
is Insolvent (as defined herein) at the time that such Benefits become payable;

<PAGE>   151

               WHEREAS, each Participating Subsidiary that executes a Deposit
Agreement has irrevocably appointed Cleveland-Cliffs its agent and attorney for
purposes of acting on its behalf with respect to this Trust; and
               WHEREAS, a Participating Employer shall be considered "Insolvent"
for purposes of this Trust Agreement at such time as such Participating Employer
(i) is subject to a pending voluntary or involuntary proceeding as a debtor
under the United States Bankruptcy Code, as heretofore or hereafter amended, or
(ii) is unable to pay its debts as they mature.
               NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of as follows:
        1.     TRUST FUND:   (a)    Subject to the claims of creditors of 
Participating Employers to the extent set forth in Section 3 hereof,
Cleveland-Cliffs hereby deposits with the Trustee in trust Ten Dollars ($10.00)
which shall become the principal of this Trust, to be held, administered and
disposed of by the Trustee as herein provided, but no payments of all or any
portion of the principal of the Trust or earnings thereon shall be made to
Cleveland-Cliffs or any other person or entity on behalf of Cleveland-Cliffs
except as herein expressly provided. The Trust hereby established shall be
irrevocable.
               (b) Cleveland-Cliffs shall notify the Trustee promptly in the
event that a "Change of Control", (as defined herein) has occurred. The term
"Change of Control" shall mean the occurrence of any of the following events:

<PAGE>   152

                      (i)     a tender offer shall be made and consummated for 
        the ownership of 30% or more of the outstanding voting securities of
        Cleveland-Cliffs;
                      (ii) Cleveland-Cliffs shall be merged or consolidated with
        another corporation and as a result of such merger or consolidation less
        than 70% of the outstanding voting securities of the surviving or
        resulting corporation shall be owned in the aggregate by the former
        shareholders of Cleveland-Cliffs, other than affiliates (within the
        meaning of the Securities Exchange Act of 1934) of any party to such
        merger or consolidation, as the same shall have existed immediately
        prior to such merger or consolidation;
                      (iii)   Cleveland-Cliffs shall sell substantially all of 
        its assets to another corporation which is not a wholly owned
        subsidiary;
                      (iv) a person, within the meaning of Section 3(a)(9) or of
        Section 13(d)(3) (as in effect on the date hereof) of the Securities
        Exchange Act of 1934, shall acquire 30% or more of the outstanding
        voting securities of Cleveland-Cliffs (whether directly, indirectly,
        beneficially or of record), or
                      (v) during any period of two consecutive years,
        individuals who at the beginning of any such period constitute the Board
        of Directors of Cleveland-Cliffs cease for any reason to constitute at
        least a majority thereof,




<PAGE>   153

        unless the election, or the nomination for election by the shareholders
        of Cleveland-Cliffs, of each Director first elected during any such
        period was approved by a vote of at least two-thirds of the Directors of
        Cleveland-Cliffs then still in office who are Directors of
        Cleveland-Cliffs on the date at the beginning of any such period.
For purposes hereof, ownership of voting securities shall take into account and
shall include ownership as determined by applying the provisions of Rule
13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Securities
Exchange Act of 1934.
               (c) Any payments by the Trustee pursuant to this Agreement shall,
to the extent thereof, discharge the obligation of the Participating Employers
to pay benefits under the Plan, it being the intent of the Participating
Employers that assets in the Trust established hereby be held as security for
the obligation of the Participating Employers to pay benefits under the Plan.
               (d) The principal of the Trust and any earnings thereon shall be
held in trust separate and apart from other funds of each Participating Employer
exclusively for the uses and purposes herein set forth. No Participant or
Beneficiary shall have any preferred claim on, or any beneficial ownership
interest in, any assets of the Trust prior to the time that such assets are paid
to a Participant or Beneficiary as Benefits as provided herein.
               (e)    A Participating Employer may at any time or from time to 
time

<PAGE>   154

make additional deposits of cash or other property in the Trust to augment the
principal to be held, administered and disposed of by the Trustee as herein
provided, but no payments of all or any portion of the principal of the Trust or
earnings thereon shall be made to a Participating Employer or any other person
or entity on behalf of a Participating Employer except as herein expressly
provided.
               (f) The Trust is intended with respect to each Participating
Employer, to be a grantor trust, within the meaning of Section 671 of the Code,
or any successor provision thereto, and shall be construed accordingly. The
Trust is not designed to qualify under Section 401(a) of the Code or to be
subject to the provisions of the Employee Retirement Income Security Act Or
1974, as amended ("ERISA"). The Trust established under this Trust Agreement No.
7 does not fund and is not intended to fund the Plan or any other employee
benefit plan or program of a Participating Employer. Such Trust is and is
intended to be a depository arrangement with the Trustee for the setting aside
of cash and other assets of the Participating Employers as and when each of the
so determines in its sole discretion for the meeting of part or all of its
future obligations with respect to Benefits to some or all of the Participants
under the Plan.
               2.     PAYMENTS TO PARTICIPANTS OR BENEFICIARIES. (a)Provided 
that the Trustee has not actually received notice as provided in Section 3
hereof that a Participant's or

<PAGE>   155

Beneficiary's Participating Employer is Insolvent, the Trustee shall make
payments of Benefits to each Participant or Beneficiary from the assets of the
Trust in accordance with the term of the Plan and subject to Section 9 hereof.
The Trustee shall make provision for withholding of any federal, state, or local
taxes that may be required to be withheld by the Trustee in connection with the
payment of any Benefits hereunder.
               (b) If the balance of a Participant's separate account maintained
pursuant to Section 7(b) hereof is not sufficient to provide for full payment of
Benefits to which a Participant or Beneficiary is entitled as provided herein,
the respective Participating Employer shall make the balance of each such
payment as provided in the Plan. No payment from the Trust assets to a
Participant or Beneficiary shall exceed the balance of such separate account.
               3.     THE TRUSTEE'S RESPONSIBILITY REGARDING PAYMENTS TO A
PARTICIPANT OR BENEFICIARY WHEN A PARTICIPATING EMPLOYER IS INSOLVENT:
               (a) At all times during the continuance of this Trust, the
principal and income of the Trust with respect to accounts maintained hereunder
on behalf of a Participating Employer shall be subject to claims of creditors of
such Participating Employer as set forth in this Section 3(a). The Board of
Directors ("Board") of Cleveland-Cliffs and of each Participating Subsidiary and
the Chief Executive Officer ("CEO") of Cleveland-Cliffs and of each
Participating Subsidiary shall have the duty to inform the Trustee if either

<PAGE>   156

the Board or the CEO believes that his or their respective Participating
Employer is Insolvent. If the Trustee receives a notice from the Board, the CEO,
or a creditor of a Participating Employer alleging that such Participating
Employer is insolvent, then unless the Trustee independently determines that
such Participating Employer is not Insolvent, the Trustee shall (i) discontinue
payments to any Participant or his Beneficiary from accounts maintained
hereunder on behalf of such Participating Employer (the "Identified
Participating Employer"), (ii) determine and allocate all Account Excesses in
accordance with Sections 4 and 7(b) hereof for the accounts of the Participants
then employed by the Identified Participating Employer, or for whom such
Identified Participating Employer has obligations and liabilities pursuant to a
Deposit Agreement, treating such accounts solely for this purpose as if they
comprised all of the accounts of the Trust, and provided that for this purpose
the Threshold Percentage shall be equal to 100%, (iii) hold the Trust assets
attributable to accounts maintained hereunder on behalf of Participants then
employed by the Identified Participating Employer, or for whom such Identified
Participating Employer has obligations and liabilities or has assumed
obligations and liabilities pursuant to a Deposit Agreement, for the benefit of
the general creditors of such Identified Participating Employer, and (iv)
promptly seek the determination of a court of competent jurisdiction regarding
the Insolvency of the Identified Participating Employer. The Trustee shall
deliver any

<PAGE>   157

undistributed principal and income in the Trust to the extent of the balances of
the accounts maintained hereunder on behalf of the Identified Participating
Employer to the extent necessary to satisfy the claims of the creditors of such
Identified Participating Employer as a court of competent jurisdiction may
direct. Such payments of principal and income shall be borne by the separate
accounts of the Participants in proportion to the balances on the date of such
court order of their respective accounts maintained pursuant to Section 7(b)
hereof. If payments to any Participant or Beneficiary have discontinued pursuant
to this Section 3(a), the Trustee shall resume payments to such Participant or
Beneficiary only after receipt of an order of a court of competent jurisdiction.
The Trustee shall have no duty to inquire as to whether a Participating Employer
is Insolvent and may rely on information concerning the Insolvency of a
Participating Employer which has been furnished to the Trustee by any creditor
of a Participating Employer or by any person. Nothing in this Trust Agreement
shall in any way diminish any rights of any Participant or Beneficiary to pursue
his rights as a general creditor of the Participant's or Beneficiary's
Participating Employer with respect to Benefits or otherwise, and the rights of
each Participant or Beneficiary under the Plan shall in no way be affected or
diminished by any provision of this Trust Agreement No. 7 or action taken
pursuant to this Trust Agreement No. 7 except that any payment actually received
by any Participant or Beneficiary hereunder shall reduce

<PAGE>   158

dollar-per-dollar amounts otherwise due to such Participant or Beneficiary
pursuant to the Plan.
               (b) If the Trustee discontinues payment of Benefits from the
Trust pursuant to Section 3(a) hereof, the Trustee shall, to the extent it has
liquid assets, place cash equal to the discontinued payments (to the extent not
paid to creditors pursuant to Section 3(a) and not paid to the Trustee pursuant
to Section 10 hereof) in such interest-bearing deposit accounts or certificates
of deposit (including any such accounts or certificates issued or offered by the
Trustee or any successor corporation but excluding obligations of any
Participating Employer) as determined by the Trustee in its sole discretion. If
the Trustee subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to the Participants and Beneficiaries in accordance with this
Trust Agreement No. 7 during the period of such discontinuance, less the
aggregate amount of payments made to any Participant or Beneficiary by the
Participating Employer pursuant to the Plan during any such period of
discontinuance, together with interest on the net amount delayed determined at a
rate equal to the rate paid on the accounts or deposits selected by the Trustee;
provided, however, that no such payment shall exceed the balance of the
respective Participant's or Beneficiary's account as provided in Section 7(b)
hereof.

<PAGE>   159

               4. PAYMENTS TO PARTICIPATING EMPLOYERS: Except to the extent
expressly contemplated by this Section 4, no Participating Employer shall have
any right or power to direct the Trustee to return any of the Trust assets to
such Participating Employer before all payments of Benefits have been made to
all Participants or Beneficiaries of such Participating Employer as herein
provided. From time to time, if and when requested by Cleveland-Cliffs to do so
and/or in order to comply with Section 7(b) hereof, the Trustee shall engage the
services of Hewitt Associates or such other independent actuary as may be
mutually satisfactory to Cleveland-Cliffs and to the Trustee to determine the
maximum actuarial present values of the future Benefits that could become
payable by each Participating Employer under the Plan with respect to the
Participants and Beneficiaries. The Trustee shall determine the fair market
values of the Trust assets allocated to the account of each Participant pursuant
to Section 7(b) hereof Cleveland-Cliffs shall pay the fees of such independent
actuary and of any appraiser engaged by the Trustee to value any property held
in the Trust. The independent actuary shall make its calculations using the 1983
Group Annuity Mortality Table, an interest rate of 8%, Gross National Product
Price Deflator increases of 4%, or such other assumptions as are recommended by
such actuary and approved by Cleveland-Cliffs and, after the date of a Change of
Control, a majority of the Participants (subject to the provisions of Sections
11(b)(i) and (b)(ii) hereof). For purposes or this Trust Agreement, (A) the
"Fully Funded"

<PAGE>   160

amount with respect to the account of a Participant or Beneficiary maintained
pursuant to Section 7(b) hereof shall be equal to the "Threshold Percentage," as
defined below, multiplied by the maximum actuarial present value of the future
Benefits that could become payable under the Plan with respect to the
Participants and Beneficiaries, (B) the "Account Excess" with respect to such
account shall be equal to the excess, if any, of the fair market value of the
assets held in the Trust allocated to a Participant's account over the
respective Fully Funded amount, and (C) the "Aggregate Account Excess" with
respect to a Participating Employer shall be equal to the excess, if any, of the
aggregate account balances of Participants then employed by the Participating
Employer, or for whom such Participating Employer has obligations and
liabilities or has assumed obligations and liabilities or has assumed
obligations and liabilities pursuant to a Deposit Agreement, over their
aggregate Fully Funded amounts. Unless otherwise provided, prior to a Change of
Control the Threshold Percentage shall be equal to 110%, and following a Change
of Control the Threshold Percentage shall be equal to 140%. The Trustee shall
allocate any Account Excess in accordance with Section 7(b) hereof. Thereafter,
upon the request of Cleveland-Cliffs, the Trustee shall pay to the Participating
Employer its Aggregate Account Excess computed upon the basis of a Threshold
Percentage equal to 140%.
               5.    INVESTMENT OF PRINCIPAL:  (a) The Trustee shall invest and

<PAGE>   161

reinvest the principal of the Trust including any income accumulated and added
to principal, as directed by the Compensation Committee of the Board of
Directors of Cleveland Cliffs (which direction may include investment in Common
Shares of Cleveland-Cliffs). In the absence of any such direction, the Trustee
shall have sole power to invest the assets of the Trust (including investment in
common shares of Cleveland-Cliffs). The Trustee shall act at all times however,
with the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent corporate trustee, acting in a like capacity and
familiar with such matters, would use in the conduct of an enterprise of a like
character and with like aims. The investment objective of the Trustee shall be
to preserve the principal of the Trust while obtaining a reasonable total rate
of return, measurement of which shall include market appreciation or
depreciation plus receipt of interest and dividends. The Trustee shall not be
required to invest nominal amounts. The Trustee shall be mindful, in the course
of its management of the Trust, of the liquidity demands on the Trust and any
actuarial assumptions that may be communicated to it from time to time in
accordance with the provisions of this Trust Agreement No. 7.
               (b) In addition to authority given to the Trustee under Section 8
hereof, the Trustee is empowered with respect to the assets of the Trust:
                   (i)     To invest and reinvest all or any part of the Trust 
        assets, in each and every kind of property, whether real, personal or
        mixed, tangible or

<PAGE>   162

        intangible, whether income or non-income producing, whether secured or
        unsecured, and wherever situated, including, but not limited to, real
        estate, shares of common and preferred stock, mortgages and bonds,
        leases (with or without option to purchase), notes, debentures,
        equipment or collateral trust certificates, and other corporate,
        individual or government securities or obligations, time deposits
        (including savings deposit and certificates of deposit in the Trustee or
        its affiliates if such deposits bear a reasonable rate of interest),
        common or collective funds or trusts, and mutual funds or investment
        companies, including affiliated investment companies and 12 B-l funds.
        Cleveland-Cliffs acknowledges and agrees that the Trustee may receive
        fees as a participating depository institution for service relating to
        the investment of funds in an eligible mutual fund.
                      (ii) At such time or times, and upon such terms and
        conditions as the Trustee shall deem advisable, to sell, convert,
        redeem, exchange, grant options for the purchase or exchange of, or
        otherwise dispose of, any property held hereunder, at public or private
        sale, for cash or upon credit, with or without security, without
        obligation on the part of any person dealing with the Trustee to see to
        the application of the proceeds of or to inquire into the validity,
        expediency, or propriety of any such disposal;
                      (iii)   To manage, operate, repair, partition, and improve
        and mortgage or lease (with or without an option to

<PAGE>   163

        purchase) for any length of time any property held in the Trust; to
        renew or extend any mortgage or lease, upon such terms as the Trustee
        may deem expedient; to agree to reduction of the rate of interest on any
        mortgage; to any modification in the terms of any lease or mortgage or
        of any guarantee pertaining to either of them; to exercise and enforce
        any right of foreclosure; to bid on property in foreclosure; to take a
        deed in lieu of foreclosure with or without paying consideration
        therefor and in connection therewith to release the obligation on the
        bond secured by the mortgage; and to exercise and enforce in any action,
        suit, or proceeding at law or in equity any rights, covenants,
        conditions or remedies with respect to any lease or mortgage or to any
        guarantee pertaining to either of them or to waive any default in the
        performance thereof;
                      (iv) To join in or oppose any reorganization,
        recapitalization, consolidation, merger or liquidation, or any plan
        therefor, or any lease (with or without an option to purchase), mortgage
        or sale of the property of any organization the securities of which are
        held in the Trust; to pay from the Trust any assessments, charges or
        compensation specified in any plan of reorganization, recapitalization,
        consolidation, merger or liquidation; to deposit any property allotted
        to the Trust in any reorganization, recapitalization, consolidation,
        merger or liquidation; to deposit any property with any committee or


<PAGE>   164





        depository; and to retain any property allotted to the Trust in any
        reorganization, recapitalization, consolidation, merger or liquidation;
                      (v) To compromise settle, or arbitrate any claim, debt or
        obligation of or against the Trust; to enforce or abstain from enforcing
        any right, claim, debt, or obligation; and to abandon any property
        determined by it to be worthless;
                      (vi) To make, execute and deliver, as Trustee, any deeds,
        conveyances, leases (with or without option to purchase), mortgages,
        options, contracts, waivers or other instruments that the Trustee shall
        deem desirable in the exercise of its powers under this Agreement; and
                      (vii) To pay out of the assets of the Trust all taxes
        imposed or levied with respect to the Trust and in its discretion may
        contest the validity or amount of any tax, assessment, penalty, claim,
        or demand respecting the Trust and may institute, maintain, or defend
        against any related action or proceeding either at law or in equity (and
        in such regard, the Trustee shall be indemnified in accordance with
        Section 8(d) hereof).
               6.     INCOME OF THE TRUST: Except as provided in Section 3 
hereof, during the continuance of this Trust all net income of the Trust shall
be allocated not less frequently than monthly among the Participants' separate
accounts in accordance with Section 7(b) hereof.



<PAGE>   165





               7.     ACCOUNTING BY TRUSTEE: (a) The Trustee shall maintain 
books, records and accounts as may be necessary for the proper administration of
Trust assets, including such specific records as shall be agreed upon in writing
by Cleveland-Cliffs and the Trustee, and shall render to Cleveland-Cliffs within
60 days following the close of each calendar year following the date of this
Trust until the termination of this Trust or the removal or resignation of the
Trustee (and within 60 days after the date of such termination, removal or
resignation), an accounting with respect to the Trust assets as of the end of
the then most recent calendar year (and as of the date of such termination,
removal or resignation, as the case may be). The Trustee shall furnish to each
Participating Employer on a quarterly basis (or as Cleveland-Cliffs shall direct
from time to time) and in a timely manner such information regarding the Trust
as each Participating Employer shall require for purposes of preparing its
statements of financial condition. The Trustee shall at all times maintain
separate bookkeeping accounts for each Participating Employer and for each
Participant as prescribed by Section 7(b) hereof, and, upon the written request
of a Participant, shall provide to him an annual statement of his account. Upon
the written request of Cleveland-Cliffs or, on or after the date of a Change of
Control, a Participant, the Trustee shall deliver to such Participant or
Cleveland-Cliffs, as the case may be, a written report setting forth the amount
held in the Trust and a record of the deposits made with respect thereto by each
Participating


<PAGE>   166





Employer. Unless Cleveland-Cliffs or any Participant shall have filed with the
Trustee written exception or objection to any such statement and account within
90 days after receipt thereof, Cleveland-Cliffs and the Participants shall be
deemed to have approved such statement and account, and in such case the Trustee
shall be forever released and discharged with respect to all matters and things
reported in such statement and account as though it had been settled by a
decreee of acourt of competent jurisdiction in an action or proceeding to which
Cleveland-Cliffs, the Participating Employers and the Participants were parties.
               (b) The Trustee shall maintain a separate account for each
Participating Employer (a "Participating Employer Account") and within such
Participating Employer Account, a separate account for each Participant who
performs services for such Participating Employer and from whom such Participant
is entitled to Benefits (a "Participant account"). Each asset of the Trust shall
be allocated to the account of a Participating Employer. Participant accounts
within a Participating Employer Account shall reflect undivided portions of each
asset in such Account. The Trustee shall credit or debit each Participant
account as appropriate to reflect such Participant's allocable portion of the
Trust assets allocated to each Participating Employer Account, as such Trust
assets may be adjusted from time to time pursuant to the terms of this Trust
Agreement No. 7. Except as otherwise provided in this Section 7(b), the Trustee
shall allocate the income (or loss) of the Trust with

<PAGE>   167

respect to each Participating Employer Account, and within such Account, to the
separate Participant accounts maintained thereunder in proportion to the
balances of the separate accounts of the Participants. Prior to the date of a
Change of Control, all deposits of principal pursuant to Section 1(a) and 1(e)
shall be allocated and reallocated as directed by the Participating Employer
making such deposit. On or after such date of a Change of Control deposits of
principal shall be allocated as Account Excess in accordance with this Section
7(b). Prior to the date of a Change of Control, at the request of
Cleveland-Cliffs the Trustee shall determine the amount of all Account Excesses.
On or after the date of a Change of Control, the Trustee shall determine
annually the amount of all Account Excesses. The Trustee shall allocate the
aggregate amount of the Account Excess of a Participating Employer to any
accounts of Participants then employed by such Participating Employer that are
not Fully Funded, as defined in Section 4 hereof, in proportion to the
differences between the respective Fully Funded amount and account balance,
insofar as possible until all accounts of Participants then employed by such
Participating Employer are Fully Funded. Any then remaining aggregate Account
Excess of a Participating Employer shall be allocated to all the accounts of
Participants then employed by such Participating Employer, in proportion to the
respective Fully Funded amounts.
               (c) Nothing in this Section 7 shall preclude the commingling of
Trust assets for investment.

<PAGE>   168

                8.    RESPONSIBILITY OF TRUSTEE: (a) The Trustee shall act with 
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent corporate trustee, acting in a like capacity and familiar with
such matters, would use in the conduct of an enterprise of a like character and
with like aims; provided, however, that the Trustee shall incur no liability to
any person for any action taken pursuant to a direction, request or approval,
contemplated by and complying with the terms of this Trust Agreement No. 7,
given in writing by any Participating Employer, by the Compensation Committee or
by a Participant or Beneficiary applicable to his or her beneficial interest
herein; and provided, further, that the Trustee shall have no duty to seek
additional deposits of principal from any Participating Employer for additional
amounts accrued under the Plan, and the Trustee shall not be responsible for the
adequacy of this Trust.
               (b) The Trustee may vote any stock or other securities and
exercise any right appurtenant to any stock, other securities or other property
held hereunder, either in person or by general or limited proxy, power of
attorney or other instrument.
               (c) The Trustee may hold securities in bearer form and may
register securities and other property held in the trust fund in its own name or
in the name of a nominee, combine certificates representing securities with
certificates of the same issue held by the Trustee in other fiduciary
capacities, and deposit, or arrange for deposit of property with any

<PAGE>   169

depository; provided that the books and records of the Trustee shall at all
times show that all such securities are part of the trust fund.
               (d) If the Trustee shall undertake or defend any litigation
arising in connection with this Trust Agreement No. 7, it shall be indemnified
jointly and severally by Cleveland-Cliffs and each Participating Subsidiary
against its costs, expenses and liabilities (including without limitation
attorneys' fees and expenses) related thereto.
               (e) The Trustee may consult with legal counsel, independent
accountants and actuaries (who may be counsel, independent accountants or
actuaries for any Participating Employer) with respect to any of its duties or
obligations hereunder, and shall be fully protected in acting or refraining from
acting in accordance with the advice of such counsel, independent accountants
and actuaries.
               (f) The Trustee may rely and shall be protected in acting or
refraining from acting within the authority granted by the terms of this Trust
Agreement No. 7 upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties.
               (g) The Trustee may hire agents, accountants, actuaries, and
financial consultants, who may be agents, accountants, actuaries, or financial
consultants, as the case may be, for any Participating Employer, and shall not
be

<PAGE>   170

answerable for the conduct of same if appointed with due care.
               (h)    The Trustee is empowered to take all actions necessary or
advisable in order to collect any benefits or payments of which the Trustee is 
the designated beneficiary.
               (i) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law unless expressly provided otherwise
herein.
               9.     AMENDMENTS, ETC. TO PLAN; COOPERATION OF PARTICIPATING
EMPLOYERS:
               (a) Cleveland-Cliffs has previously furnished the Trustee a
complete and correct copy of the Plan, and Cleveland-Cliffs shall, and any
Participating Subsidiary, Participant, or Beneficiary may, promptly furnish the
Trustee true and correct copies of any amendment, restatement or successor
thereto, whereupon such amendment, restatement or successor shall be
incorporated herein by reference, provided that such amendment, restatement or
successor shall not affect the Trustee's duties and responsibilities hereunder
without the consent of the Trustee.
               (b) Cleveland-Cliffs shall provide the Trustee with all
information requested by the Trustee for purposes of determining payments to the
Participants and Beneficiaries or withholding of taxes as provided in Section 2.
Upon the failure of Cleveland-Cliffs or any Participant or Beneficiary to
provide any such information, the Trustee shall, to the extent necessary in the
sole

<PAGE>   171

judgment of the Trustee, (i) compute the amount payable hereunder to any
Participant or Beneficiary; and (ii) notify Cleveland-Cliffs and the Participant
or Beneficiary in writing of its computations. Thereafter this Trust Agreement
No. 7 shall be construed as to the Trustee's duties and obligations hereunder in
accordance with such Trustee determinations without further action; provided,
however, that no such determinations shall in any way diminish the rights of any
Participant or Beneficiary hereunder or under the Plan; and provided, further,
that no such determinations shall be deemed to modify this Trust Agreement No. 7
or the Plan. Nothing in this Trust Agreement No. 7 shall restrict
Cleveland-Cliffs' right to amend, modify or terminate the Plan.
               (c) At such times as may in the judgment of Cleveland-Cliffs be
appropriate, Cleveland-Cliffs shall furnish to the Trustee any amendment to
Exhibit A for the purpose of the addition of Participants (or the deletion of
Participants who (together with their Beneficiaries) have no Benefits currently
due or payable in the future)) to Exhibit A; provided, however, that no such
amendment shall be made after the date of a Change of Control.
               10.    COMPENSATION AND EXPENSES OF TRUSTEE:   The Trustee shall
be entitled to receive such reasonable compensation for its services as shall be
agreed to upon by Cleveland-Cliffs and the Trustee.  The Trustee shall also be
entitled to reimbursement of its reasonable expenses incurred with respect to 
the administration of the Trust including fees and expenses incurred pursuant to

<PAGE>   172

Sections 8(d), 8(e) and 8(g) and liabilities to creditors pursuant to court
direction as provided in Section 3(a) hereof. Such compensation and expenses
shall in all events be payable either directly by Cleveland-Cliffs or, in the
event that Cleveland-Cliffs shall refuse, from the assets of the Trust and
charged pro rata in proportion to each separate account balance. The Trust shall
have a claim against Cleveland-Cliffs for any such compensation or expenses so
paid.
               11. REPLACEMENT OF THE TRUSTEE: (a) Prior to the date of a Change
of Control, the Trustee may be removed by Cleveland-Cliffs. On or after the date
of a Change of Control, the Trustee may be removed at any time by agreement of
Cleveland-Cliffs and a majority of the Participants. The Trustee may resign
after providing not less than 90 days' notice to Cleveland-Cliffs and to the
Participants. In case of removal or resignation, a new trustee, which shall be
independent and not subject to control of either Cleveland Cliffs or the
Participants and Beneficiaries, shall be appointed as shall be agreed by
Cleveland-Cliffs and a majority of the Participants. No such removal or
resignation shall become effective until the acceptance of the trust by a
successor trustee designated in accordance with this Section 11. If the Trustee
should resign, and within 45 days of the notice of such resignation
Cleveland-Cliffs and the Participants shall not have notified the Trustee of an
agreement as to a replacement trustee, the Trustee shall appoint a successor
trustee, which shall be a bank or trust company, wherever located, having a
capital and surplus of at

<PAGE>   173

least $500,000,000 in the aggregate.
               (b) For purposes of the removal or appointment of a Trustee under
this Section 11, (i) if any Participant shall be deceased or adjudged
incompetent, such Participant's Beneficiaries shall participate in such
Participant's stead, and (ii) a Participant shall not participate if all
payments of Benefits then currently due or payable in the future have been made
to such Participant or his Beneficiary.
               12.    AMENDMENT OR TERMINATION:    (a)  This Trust Agreement No.
7 may be amended by Cleveland-Cliffs and the Trustee without the consent of any
Participant or Beneficiary provided the amendment does not adversely affect any
Participant or Beneficiary.  This Trust Agreement No. 7 may also be amended at
any time and to any extent by a written instrument executed by the Trustee, all
Participating Employers, and a majority of the Participants, except to alter 
Section 12(b), and except that amendments to Exhibit A contemplated by Section 
9(b) hereof shall be made as therein provided.
               (b) The Trust shall terminate on the date on which the Trust no
longer contains any assets, or, if earlier, the date on which no Participant or
Beneficiary is entitled to further payments hereunder.
               (c) Upon termination of the Trust as provided in Section 12(b)
hereof, any assets remaining in the Trust shall be returned to Cleveland-Cliffs
or as it directs.
               13.    SPECIAL DISTRIBUTION:   (a)  It is intended that (i) the 
creation of,

<PAGE>   174

and transfer of assets to, the Trust will not cause the Plan to be other than
"unfunded" for purposes of title I of the Employee Retirement Income Security
Act of 1974, as amended, or any successor provision thereto ("ERISA"); (ii)
transfers of assets to the Trust will not be transfers of property for purposes
of section 83 of the Code, or any successor provision thereto, nor will such
transfers cause a currently taxable benefit to be realized by a Participant or
Beneficiary pursuant to the "economic benefit doctrine; and (iii) pursuant to
section 451 of the Code, or any successor provision thereto, amounts will be
includable as compensation in the gross income of a Participant or Beneficiary
in the taxable year or years in which such amounts are actually distributed or
made available to such Participant or Beneficiary by the Trustee.
               (b) Notwithstanding anything to the contrary contained in this
Trust Agreement No. 7, in the event it is determined by a final decision of the
Internal Revenue Service, or, if an appeal is taken therefrom, by a court of
competent jurisdiction that (i) by reason of the creation of, and a transfer of
assets to, the Trust, the Trust is considered "funded" for purposes of title I
of ERISA; or (ii) a transfer of assets to the Trust is considered a transfer of
property for purposes of section 83 of the Code or any successor provision
thereto; or (iii) a transfer of assets to the Trust causes a Participant or
Beneficiary to realize income pursuant to the "economic benefit" doctrine; or
(iv) pursuant to section 451 of the Code or any successor provision thereto,
amounts are

<PAGE>   175

includable as compensation in the gross income of a Participant or Beneficiary
in a taxable year that is prior to the taxable year or years in which such
amounts would, but for this Section 13, otherwise actually be distributed or
made available to such Participant or Beneficiary by the Trustee, then (A) the
assets held in Trust shall be allocated in accordance with Section 7(b) hereof,
and (B) subject to the last sentence of Section 2(b) hereof, the Trustee shall
promptly make a distribution to each affected Participant or Beneficiary which,
after taking into account the federal, state and local income tax consequences
of the special distribution itself, is equal to the sum of any federal, state
and local income taxes, interest due thereon, and penalties assessed with
respect thereto, which are attributable to amounts that are includable in the
income of such Participant or Beneficiary for any of the reasons described in
clause (i), (ii), (iii) or (iv) of this Section 13(b).
               14.    PARTICIPATING SUBSIDIARY DEPOSIT AGREEMENT:(a)    Upon
execution of a Deposit Agreement in the form of Exhibit C hereto, a Subsidiary
may at any time or from time to time make deposits of cash or other property in
the Trust pursuant to Section 1(d) hereof. Such Deposit Agreement shall provide,
among other things, for the designation of Cleveland-Cliffs as agent and
attorney for the Participating Subsidiary for all purposes under this Trust
Agreement No. 7, including consenting to any amendments hereto, consenting to
any Trustee accounts and consenting to anything requiring the approval or
consent of a

<PAGE>   176

Participating Employer hereunder.
               (b)    Cleveland-Cliffs is the sponsoring grantor for this Trust
Agreement No. 7.  It reserves to itself, and each Subsidiary by execution of a
Deposit Agreement delegates to Cleveland-Cliffs, the power to amend or
terminate this Trust Agreement No. 7 in accordance with its terms.
               15.    SEVERABILITY ALIENATION, ETC.:    (a)   Any provision of 
this Trust Agreement No. 7 prohibited by law shall be ineffective to the extent
of any such prohibition without invalidating the remaining provisions hereof.
               (b)    To the extent permitted by law, benefits to Participants 
and Beneficiaries under this Trust Agreement No. 7 may not be anticipated,
assigned (either by law or in equity), alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process and no benefit
provided for herein and actually paid to any Participant or Beneficiary by the
Trustee shall be subject to any claim for repayment by any Participating
Employer or the Trustee.
               (c)    This Trust Agreement No. 7 shall be governed by and 
construed in accordance with the laws of the State of Ohio, without giving
effect to the principles of conflict of laws thereof.
               (d)    This Trust Agreement No. 7 may be executed in two or more
counterparts, each of which shall be considered an original agreement.  This
Trust Agreement No. 7 shall become effective immediately upon the execution by
Cleveland-Cliffs of at least one counterpart, it being understood that all 
parties

<PAGE>   177

need not sign the same counterpart, but shall not bind any Trustee until such
Trustee has executed at least one counterpart.
               (e) Each action taken by Cleveland-Cliffs hereunder shall, unless
otherwise designated in such action by Cleveland-Cliffs or unless the context or
this Trust Agreement No. 7 requires otherwise, be deemed to be an action of
Cleveland-Cliffs on behalf of each Participating Subsidiary pursuant to the
authority granted to Cleveland-Cliffs by such Participating Subsidiary in the
Deposit Agreement.
               16.    NOTICES; IDENTIFICATION OF CERTAIN PARTICIPANTS OR 
BENEFICIARIES:   
               (a) All notices, requests, consents and other communications 
hereunder shall be in writing and shall be deemed to have been duly given when
received:

               If to the Trustee, to:

               Ameritrust Company National Association
               900 Euclid Avenue
               Cleveland, Ohio 44115
               Attention:  Trust Department
                                 Employee Benefit Administration

               If to Cleveland-Cliffs, to:

               Cleveland-Cliffs Inc
               1100 Superior Avenue
               Cleveland, OH 44114
               Attention:  Secretary

               If to the Participants, to the addresses listed on Exhibit A
               hereto; and if to the Beneficiaries, to the addresses provided to
               the Trustee by Cleveland-Cliffs;

provided, however, that if any party or any Participant or Beneficiary or his 
or its


<PAGE>   178




successors shall have designated a different address by written notice to the
other parties, then to the last address so designated.
               IN WITNESS WHEREOF, Cleveland-Cliffs and the Trustee have caused
counterparts of this Trust Agreement No. 7 to be executed on their behalf on
April 9, 1991, each of which shall be an original agreement.

                                            CLEVELAND-CLIFFS INC



                                            By:  Richard F. Novak
                                                 -------------------------
                                            Its: V.P. of Human Resources
                                                 -------------------------

                                            AMERITRUST COMPANY NATIONAL
                                            ASSOCIATION

                                            By:  J.P. Russell
                                                 -------------------------
                                            Its: Vice President
                                                 -------------------------
<PAGE>   179
                                                                       EXHIBIT A
                                                                       ---------

                     All Senior Officers and Other Full-Time
                    Salaried Employees Grade EX-28 and Above/
                          Eligible Participants in SERP





    Name                              Title
--------------        ----------------------------------------------
M. T. Moore           Chairman and Chief Executive Officer
J. S. Brinzo          Executive Vice President-Finance and Planning
W. R. Calfee          Executive Vice President-Commercial
T. J. O'Neil          Executive Vice President-Operations
J. W. Sanders         Senior Vice President-International Development
A. S. West            Senior Vice President-Sales
F. L. Hartman         Vice President and General Counsel
R. F. Novak           Vice President-Human Resources
J. A. Trethewey       Vice President-Operations Services
C. B. Bezik           Vice President and Treasurer
R. Emmet              Vice President and Controller
G. N. Chandler        Vice President-Reduced Iron
J. E. Lenhard         Secretary and Assistant General Counsel
R. C. Berglund        General Manager- Northshore Mine
L. G. Dykers          General Manager- Hibbing Taconite
D. Lebel              General Manager-Wabush Mines
M. P. Mlinar          General Manager-Tilden Mine
T. S. Petersen        General Manager-Empire Mine
J. N. Tuomi           General Manager-LTV Steel Mining Company
R. W. von Bitter      General Manager-Cliffs Reduced Iron Corp.



6-30-97

<PAGE>   180
                                                                       Exhibit B









                              CLEVELAND-CLIFFS INC
                      SUPPLEMENTAL RETIREMENT BENEFIT PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
               ---------------------------------------------------







CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   181




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

                                                                           PAGE
                                                                           ----


                                                                       
1.   DEFINITIONS............................................................  1
     -----------

2.   DETERMINATION OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.................  3
     ------------------------------------------------------

3.   PAYMENT OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.......................  4
     ------------------------------------------------

4.   FORFEITABILITY.........................................................  6
     --------------

5.   GENERAL................................................................  6
     -------

6.   ADOPTION OF SUPPLEMENTAL RETIREMENT BENEFIT PLAN.......................  8
     ------------------------------------------------

7.   MISCELLANEOUS..........................................................  8
     -------------

8.   AMENDMENT AND TERMINATION............................................... 9
     -------------------------

9.   EFFECTIVE DATE......................................................... 10
     --------------







CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   182



                              CLEVELAND-CLIFFS INC
                      SUPPLEMENTAL RETIREMENT BENEFIT PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
               ---------------------------------------------------


                  WHEREAS, Cleveland-Cliffs Inc ("Cleveland-Cliffs") and its
subsidiary corporations and affiliates have established, or may hereafter
establish, one or more qualified retirement plans;

                  WHEREAS, the qualified retirement plans, pursuant to Sections
401(a) and 415 of the Internal Revenue Code of 1986, as amended, place certain
limitations on the amount of contributions that would otherwise be made
thereunder for certain participants;

                  WHEREAS, Cleveland-Cliffs now desires to provide for the
contributions which would otherwise have been made for such participants under
certain of its qualified retirement plans except for such limitations, in
consideration of services performed and to be performed by each such participant
for Cleveland-Cliffs and its subsidiaries and affiliates; and

                  WHEREAS, Cleveland-Cliffs has entered into, and
Cleveland-Cliffs and its subsidiary corporations and affiliates may in the
future enter into, agreements with certain executives providing for additional
service credit and/or other features for purposes of computing retirement
benefits, in consideration of services performed and to be performed by such
executives for Cleveland-Cliffs and its subsidiaries and affiliates.

                  NOW, THEREFORE, Cleveland-Cliffs hereby amends and restates
and publishes the Supplemental Retirement Benefit Plan heretofore established by
it, which shall contain the following terms and conditions:

                  1.  DEFINITIONS.  A.  The following words and phrases when 
used in this Plan with initial capital letters shall have the following
respective meanings, unless the context clearly indicates otherwise. The
masculine whenever used in this Plan shall include the feminine.

                  B.  "AFFILIATE" shall mean any partnership or joint
venture of which any member of the Controlled Group is a partner or venturer and
which shall adopt this Plan pursuant to paragraph 6.

                  C.  "BENEFICIARY" shall mean such person or persons (natural 
or otherwise) as may be designated by the Participant as his Beneficiary under
this Plan. Such a designation may be made, and may be revoked or changed
(without the consent of any previously designated Beneficiary), only by an
instrument (in form acceptable to Cleveland-Cliffs) signed by the Participant
and may be revoked or changed (without the consent of any previously designated
Beneficiary), only by an instrument (in form acceptable to Cleveland-Cliffs)
signed by the Participant


CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   183


                                                                               2

and filed with Cleveland-Cliffs prior to the Participant's death. In the absence
of such a designation and at any other time when there is no existing
Beneficiary designated by the Participant to whom payment is to be made pursuant
to his designation, his Beneficiary shall be his beneficiary under the Pension
Plan. A person designated by a Participant as his Beneficiary who or which
ceases to exist shall not be entitled to any part of any payment thereafter to
be made to the Participant's Beneficiary unless the Participant's designation
specifically provided to the contrary. If two or more persons designated as a
Participant's Beneficiary are in existence, the amount of any payment to the
Beneficiary under this Plan shall be divided equally among such persons unless
the Participant's designation specifically provided to the contrary.
Notwithstanding the foregoing, the Beneficiary of a Participant who elects the
form of benefit elected by the Participant under the Pension Plan shall be the
same beneficiary designated by him or her thereunder.

                  D.  "CODE" shall mean the Internal Revenue Code of
1986, as it has been and may be amended from time to time.

                  E.  "CODE LIMITATIONS" shall mean the limitations
imposed by Sections 401(a) and 415 of the Code, or any successor
thereto, on the amount of the benefits which may be payable to a
Participant from the Pension Plan.

                  F.  "CONTROLLED GROUP" shall mean Cleveland-Cliffs and any
corporation in an unbroken chain of corporations beginning with
Cleveland-Cliffs, if each of the corporations other than the last corporation in
the chain owns or controls, directly or indirectly, stock possessing not less
than fifty percent of the total combined voting power of all classes of stock in
one of the other corporations.

                  G.  "EMPLOYER(S)" shall mean Cleveland-Cliffs and any
other member of the Controlled Group and any Affiliate which
shall adopt this Plan pursuant to paragraph 6.

                  H.  "PARTICIPANT" shall mean each person (i) who is a
participant in the Pension Plan, (ii) who is a senior corporate officer of
Cleveland-Cliffs or a full-time salaried employee of an Employer who has a
Management Performance Incentive Plan Salary Grade of EX-28 or above, and (iii)
who as a result of participation in this Plan is entitled to a Supplemental
Benefit under this Plan. Each person who is as a Participant under this Plan
shall be notified in writing of such fact by his Employer, which shall also
cause a copy of the Plan to be delivered to such person.

                  I.  "PENSION PLAN" shall mean, with respect to any
Participant, the defined benefit plan specified on Exhibit A
hereto in which he participates.

                  J.  "SUPPLEMENTAL AGREEMENT" shall mean, with respect to any 
Participant, an agreement between the Participant and an

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   184


                                                                               3

Employer, and approved by Cleveland-Cliffs if it is not the Employer, which
provides for additional service credit and/or other features for purposes of
computing retirement benefits.

                  K.  "SUPPLEMENTAL BENEFIT" or "SUPPLEMENTAL PENSION PLAN 
BENEFIT" shall mean a retirement benefit determined as provided in paragraph 2.

                  L.  "SUPPLEMENTAL RETIREMENT BENEFIT PLAN" or "PLAN" shall 
mean this Plan, as the same may hereafter be amended or restated from time to 
time.

                  2. DETERMINATION OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.
Each Participant or Beneficiary of a deceased Participant whose benefits under
the Pension Plan payable on or after January l, 1995 are reduced (a) due to the
Code Limitations, or (b) due to deferrals of compensation by such Participant
under the Cleveland-Cliffs Inc Voluntary Non- Qualified Deferred Compensation
Plan (the "Deferred Compensation Plan"), and each Participant who has entered
into a Supplemental Agreement with his Employer (and, where applicable a
Beneficiary of a deceased Participant), shall be entitled to a Supplemental
Pension Plan Benefit, which shall be determined as hereinafter provided. A
Supplemental Pension Plan Benefit shall be a monthly retirement benefit equal to
the difference between (i) the amount of the monthly benefit payable on and
after January l, 1995 to the Participant or his Beneficiary under the Pension
Plan, determined under the Pension Plan as in effect on the date of the
Participant's termination of employment with the Controlled Group and any
Affiliate (and payable in the same optional form as his Actual Pension Plan
Benefit, as defined below), but calculated without regard to any reduction in
the Participant's compensation pursuant to the Deferred Compensation Plan, and
as if the Pension Plan did not contain a provision (including any phase-in or
extended wear away provision) implementing the Code Limitations, and after
giving effect to the provisions of any Supplemental Agreement, and (ii) the
amount of the monthly benefit in fact payable on and after January 1, 1995 to
the Participant or his Beneficiary under the Pension Plan. If the benefit
payable to a Participant or Beneficiary pursuant to clause (ii) of the
immediately preceding sentence (herein referred to as "Actual Pension Plan
Benefit") is payable in a form other than a monthly benefit, such Actual Pension
Plan Benefit shall be adjusted to a monthly benefit which is the actuarial
equivalent of such Actual Pension Plan Benefit for the purpose of calculating
the monthly Supplemental Pension Plan Benefit of the Participant or Beneficiary
pursuant to the preceding sentence. For any Participant whose benefits become
payable under the Pension Plan on or after January 1, 1995, the Supplemental
Pension Plan Benefit includes any "Retirement Plan Augmentation Benefit" which
the Participant shall have accrued under the Deferred Compensation Plan prior to
the amendment of such Plan as of January l, 1991 to delete such Benefit. The
acceptance by the Participant or his Beneficiary of any Supplemental Pension
Plan Benefit pursuant to paragraph 3 shall constitute payment of the

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   185


                                                                               4

Retirement Plan Augmentation Benefit included therein for purposes of the
Deferred Compensation Plan prior to such amendment.

                  3.    PAYMENT OF THE SUPPLEMENTAL PENSION PLAN BENEFIT.

                  (a)   A Participant's (or his Beneficiary's) Supplemental
                        Pension Plan Benefit (calculated as provided in
                        paragraph 2) shall be converted, at the time of his
                        termination of employment with the Controlled Group and
                        each Affiliate, into ten annual installment payments
                        (the "Ten Installment Payments") of equivalent actuarial
                        value. The equivalent actuarial value shall be
                        determined by the actuary selected by Cleveland-Cliffs
                        based on the 1971 TPF&C Forecast Mortality Table set
                        back one year, the Pension Benefit Guaranty Corporation
                        interest rate for immediate annuities then in effect,
                        and other factors then in effect for purposes of the
                        Pension Plan.

                  (b)   If the Participant voluntarily terminates employment
                        with, or retires under the terms of the Pension Plan
                        from, the Controlled Group and each Affiliate, or the
                        Participant's employment with the Controlled Group and
                        each Affiliate is involuntarily terminated, the
                        Participant's former Employer shall pay the Ten
                        Installment Payments to the Participant beginning on the
                        first day of the month following the Participant's
                        retirement under the Pension Plan, and on each
                        anniversary thereafter until the Ten Installment
                        Payments have been made; provided, however, that if the
                        Participant has effectively elected another form of
                        distribution, such Participant's former Employer shall
                        pay or commence payment in such other form of
                        distribution beginning on the first day of the month
                        following the date of the Participant's retirement under
                        the Pension Plan. A Participant who voluntarily
                        terminates employment with, or who retires under the
                        terms of the Pension Plan from, the Controlled Group and
                        each Affiliate may by written notice filed with the
                        Administrator at least one (1) year prior to the
                        Participant's voluntary termination of employment with,
                        or retirement from, the Controlled Group and each
                        Affiliate elect to defer commencement of the payment of
                        his 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 Administrator; provided that any election made
                        less than one (1) year prior to the Participant's
                        voluntary termination of employment

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   186


                                                                               5

                        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 this paragraph 3.

                  (c)   A Participant may elect to receive his Supplemental
                        Pension Plan Benefit in one of the following forms of
                        distribution in lieu of the Ten Installment Payments:

                        (1)   Lump sum payment;

                        (2)   Annual installments over 2 to 15 years;

                        (3)   A combination of (1) and (2) above with the
                              percentage payable under each option specifically
                              designated by the Participant; or

                        (4)   The form of benefit distribution elected by the
                              Participant under the Pension Plan.

                        Payments made under these options shall commence as of
                        the first day of the month following the Participant's
                        retirement under the Pension Plan; provided, however,
                        that with respect to a lump sum payment, such payment
                        shall be made at the end of the of the first month of
                        retirement or at the end of the month following death.

                        The payments made under these forms shall be of
                        equivalent actuarial value to the Ten Installment
                        Payments as determined by the actuary selected by
                        Cleveland-Cliffs based on the actuarial factors and
                        assumptions provided for in the second sentence of
                        paragraph 3(a). Notwithstanding the foregoing, the
                        Administrator may, at any time, direct that annual
                        installments shall be made quarterly. If the Participant
                        dies before receiving all of the installment payments,
                        the remaining installment payments shall be paid in a
                        lump sum to the Participant's Beneficiary. Any
                        co-pensioner or survivor payments elected under clause
                        (4) of this paragraph 3(c) shall be paid to the
                        co-pensioner or survivor, as appropriate. The
                        Participant's election of one of the forms of
                        distribution set forth above shall be made by written
                        notice filed with the Administrator at least one (1)
                        year prior to the Participant's voluntary or involuntary
                        termination of employment, retirement, death or
                        disability. 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 Administrator; provided

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   187


                                                                               6

                        that any election made less than one (1) year prior to
                        the Participant's voluntary or involuntary termination
                        of employment, retirement, death or disability 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 Administrator may, in its
                        sole discretion, waive such one (1) year period upon a
                        request of the Participant made while an active employee
                        of his or her Employer.

                  (d)   Anything contained in this paragraph 3 to the contrary
                        notwithstanding, in the event a Participant's employment
                        with the Controlled Group and each Affiliate is
                        involuntarily terminated, the Administrator may, at any
                        time, direct immediate payment of such Participant's
                        benefit under the Plan and the manner of distribution
                        for such payment; provided, however, that if the
                        administrator elects immediate payment as set forth in
                        this paragraph 3(d), such payment shall not be made in
                        accordance with the distribution alternative described
                        in paragraph 3(c)(4) of the Plan.

                  (e)   Notwithstanding any other provision of this paragraph 3,
                        a Participant may elect to receive a lump sum
                        distribution of part or all of his or her benefits under
                        clause (1), (2), or (3) of paragraph 3(c) if (and only
                        if) the amount 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 Administrator.
                        The remaining six percent (6%) of the electing
                        Participant's benefit balance subject to such lump sum
                        distribution shall be forfeited.

                  4.    FORFEITABILITY. Anything herein to the contrary
notwithstanding, if the Board of Directors of Cleveland-Cliffs shall determine
in good faith that a Participant who is entitled to a benefit hereunder by
reason of termination of his employment with the Controlled Group and each
Affiliate, during the period of 5 years after termination of his employment or
until he attains age 65, whichever period is shorter, has engaged in a business
competitive with Cleveland-Cliffs or any member of the Controlled Group or any
Affiliate without the prior written consent of Cleveland-Cliffs, such
Participant's rights to a supplemental Pension Plan Benefit hereunder and the
rights, if any, of his Beneficiary shall be terminated and no further
Supplemental Benefit shall be paid to him or his Beneficiary hereunder.

                  5.    GENERAL.  A.  The entire cost of this Supplemental
Retirement Benefit Plan shall be paid from the general assets of

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   188


                                                                               7

one or more of the Employers. It is the intent of the Employers to so pay
benefits under the Plan as they become due; provided, however, that
Cleveland-Cliffs may, in its sole discretion, establish or cause to be
established a trust account for any or each Participant pursuant to an
agreement, or agreements, with a bank and direct that some or all of a
Participant's benefits under the Plan be paid from the general assets of his
Employer which are transferred to the custody of such bank to be held by it in
such trust account as property of the Employer subject to the claims of the
Employer's creditors until such time as benefit payments pursuant to the Plan
are made from such assets in accordance with such agreement; and until any such
payment is made, neither the Plan nor any Participant or Beneficiary shall have
any preferred claim on, or any beneficial ownership interest in, such assets. No
liability for the payment of benefits under the Plan shall be imposed upon any
officer, director, employee, or stockholder of Cleveland-Cliffs or other
Employer.

                  B.   No right or interest of a Participant or his Beneficiary
under this Supplemental Retirement Benefit Plan shall be anticipated, assigned
(either at law or in equity) or alienated by the Participant or his Beneficiary,
nor shall any such right or interest be subject to attachment, garnishment,
levy, execution or other legal or equitable process or in any manner be liable
for or subject to the debts of any Participant or Beneficiary. If any
Participant or Beneficiary shall attempt to or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his benefits under the Plan or any part
thereof, or if by reason of his bankruptcy or other event happening at any time
such benefits would devolve upon anyone else or would not be enjoyed by him,
then Cleveland-Cliffs may terminate his interest in any such benefit and hold or
apply it to or for his benefit or the benefit of his spouse, children or other
person or persons in fact dependent upon him, or any of them, in such a manner
as Cleveland-Cliffs may deem proper; provided, however, that the provisions of
this sentence shall not be applicable to the surviving spouse of any deceased
Participant if Cleveland-Cliffs consent: to such inapplicability, which consent
shall not unreasonably be withheld.

                  C.   Employment rights shall not be enlarged or affected 
hereby. The Employers shall continue to have the right to discharge or retire a
Participant, with or without cause.

                  D.   Notwithstanding any other provisions of this Plan to the
contrary, if Cleveland-Cliffs 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, Cleveland-Cliffs 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 his then vested Supplemental Benefit. Upon such payment, no
benefits shall thereafter be payable under this

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   189


                                                                               8

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
Supplemental Benefit shall be deemed to be cancelled.

                  6.    ADOPTION OF SUPPLEMENTAL RETIREMENT BENEFIT PLAN. Any
member of the Controlled Group or any Affiliate which is an employer under the
Pension Plan may become an Employer hereunder with the written consent of
Cleveland-Cliffs if such member or such Affiliate executes an instrument
evidencing its adoption of the Supplemental Retirement Benefit Plan and files a
copy thereof with Cleveland-Cliffs. Such instrument of adoption may be subject
to such terms and conditions as Cleveland-Cliffs requires or approves.

                  7. MISCELLANEOUS. A. The Plan shall be administered by the
Plan Administrator (the "Administrator"). The Administrator shall have such
powers as may be necessary to discharge his duties hereunder, including, but not
by way of limitation, 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) and
determine the amount and time of payment of any benefits hereunder. The
Administrator may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit, and may from time to time consult with
legal counsel who may be counsel to Cleveland- Cliffs. The Administrator shall
have no power to add to, subtract from or modify any of the terms of the Plan,
or to change or add to any benefits provided under the Plan, or to waive or fail
to apply any requirements of eligibility for a benefit under the Plan. No member
of the Administrator shall act in respect of his own benefits. All decisions and
determinations by the Administrator shall be final and binding on all parties.
All decisions of the Administrator shall be made by the vote of the majority, if
applicable, including actions and writing taken without a meeting. All
elections, notices and directions under the Plan by a Participant shall be made
on such forms as the Administrator shall prescribe.

                  B.       Cleveland-Cliffs shall be the "Administrator" and
the "Plan Sponsor" under the Plan for purposes of ERISA.

                  C.       Except to the extent federal law controls, all
questions pertaining to the construction, validity and effect of the provisions
hereof shall be determined in accordance with the laws of the State of Ohio.

                  D.       Whenever there is denied, whether in whole or in 
part, a claim for benefits under the Plan filed by any person (herein referred
to as the "Claimant"), the plan administrator shall transmit a written notice of
such decision to the Claimant, which notice shall be written in a manner
calculated to be understood by the Claimant and shall contain a statement of the
specific reasons for the denial of the claim and statement

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   190

                                                                               9

advising the Claimant that, within 60 days of the date on which he receives such
notice, he may obtain review of such decision in accordance with the procedures
hereinafter set forth. Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing with the
plan administrator a written request therefor, which request shall contain the
following information:

                  (i) the date on which the Claimant's request was filed with
            the plan administrator; provided, however, that the date on which
            the Claimant's request for review was in fact filed with the plan
            administrator shall control in the event that the date of the actual
            filing is later than the date stated by the Claimant pursuant to
            this paragraph;

                  (ii) the specific portions of the denial of his claim which
            the Claimant requests the plan administrator to review;

                  (iii) a statement by the Claimant setting forth the basis upon
            which he believes the plan administrator should reverse the previous
            denial of his claim for benefits and accept his claim as made; and

                  (iv) any written material (offered as exhibits) which the
            Claimant desires the plan administrator to examine in its
            consideration of his position as stated pursuant to clause (iii)
            above.

Within 60 days of the date determined pursuant to clause (i) above, the plan
administrator shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits. Within 60 days of the date of such hearing, the
plan administrator shall render its written decision on review, written in a
manner calculated to be understood by the Claimant, specifying the reasons and
Plan provisions upon which its decision was based.

                  E.     Supplemental Pension Plan Benefits shall be subject to
applicable withholding and such other deductions as shall at the time of payment
be required or appropriate under any Federal, State or Local law. In addition,
Cleveland-Cliffs may withhold from a Participant's "other income" (as
hereinafter defined) any amount required or appropriate to be currently withheld
from such Participant's other income pursuant to any Federal, State or Local
law. For purposes of this subparagraph E, "other income" shall mean any
remuneration currently paid to a Participant by an Employer.

                  8.     AMENDMENT AND TERMINATION.  A.  Cleveland-Cliffs has 
reserved and does hereby reserve the right to amend, at any time, any or all of
the provisions of the Supplemental Retirement Benefit Plan for all Employers,
without the consent of any other Employer or any Participant, Beneficiary or any
other person. Any such amendment shall be expressed in an instrument executed

CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   191


                                                                              10

by Cleveland-Cliffs and shall become effective as of the date designated in such
instrument or, if no such date is specified, on the date of its execution.

                  B.     Cleveland-Cliffs has reserved, and does hereby reserve,
the right to terminate the Supplemental Retirement Benefit Plan at any time for
all Employers, without the consent of any other Employer or of any Participant,
Beneficiary or any other person. Such termination shall be expressed in an
instrument executed by Cleveland-Cliffs and shall become effective as of the
date designated in such instrument, or if no date is specified, on the date of
its execution. Any other Employer which shall have adopted the Plan may, with
the written consent of Cleveland-Cliffs, elect separately to withdraw from the
Plan and such withdrawal shall constitute a termination of the Plan as to it,
but it shall continue to be an Employer for the purposes hereof as to
Participants or Beneficiaries to whom it owes obligations hereunder. Any such
withdrawal and termination shall be expressed in an instrument executed by the
terminating Employer and shall become effective as of the date designated in
such instrument or, if no date is specified, on the date of its execution.

                  C.     Notwithstanding the foregoing provisions hereof, no
amendment or termination of the Supplemental Retirement Benefit Plan shall,
without the consent of the Participant (or, in the case of his death, his
Beneficiary), adversely affect (i) the benefit under the Plan of any Participant
or Beneficiary then entitled to receive a benefit under the Plan or (ii) the
right of any other Participant to receive upon termination of his employment
with the Controlled Group and each Affiliate (or the right of his Beneficiary to
receive upon such Participant's death) that benefit which would have been
received under the Plan if such employment of the Participant had terminated
immediately prior to the amendment or termination of the Plan. Upon any
termination of the Plan, each affected Participant's Supplemental Benefit shall
be determined and distributed to him or, in the case of his death, to his
Beneficiary as provided in paragraph 3 as if the employment of the Participant
with the Controlled Group and each Affiliate had terminated immediately prior to
the termination of the Plan.

         9.       EFFECTIVE DATE.  The amended and restated Supplemental
Retirement Benefit Plan shall be effective as of January 1, 1997.

                  IN WITNESS WHEREOF, Cleveland-Cliffs Inc, pursuant to the
order of its Board of Directors, has executed this amended and restated
Supplemental Retirement Benefit Plan at Cleveland, Ohio, this 24th day of APRIL,
1997.

                                            CLEVELAND-CLIFFS INC

                                            By R. F.NOVAK
                                              --------------------------------
                                              Vice President - Human Resources


CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   192


                                                                              11


                                    EXHIBIT A
                                    ---------


PENSION PLANS
-------------

Pension Plan for Salaried Employees of Cleveland-Cliffs Inc

Pension Plan for Salaried Employees of the Cleveland-Cliffs Iron
Company and its Associated Employers

Retirement Plan for Salaried Employees of Northshore Mining
Company and Silver Bay Power Company






CLTAX01 Doc: 131346_9
218095-005-001
Last revised March 18, 1997

<PAGE>   193
                                                                       Exhibit C

                 DEPOSIT AGREEMENT FOR PARTICIPATING SUBSIDIARY
                 ----------------------------------------------

                                   WITNESSETH:
                                   -----------

                  WHEREAS, the undersigned is a subsidiary corporation or
affiliate of Cleveland-Cliffs Inc and contributes to the Plan as defined in a
certain Trust Agreement No. 7 dated April 9, 1991, by and between
Cleveland-Cliffs Inc, an Ohio corporation ("Cleveland-Cliffs"), and Ameritrust
Company National Association, a national banking association ("Trustee"); and
                  WHEREAS, the undersigned wishes to become a Participating
Subsidiary and Participating Employer pursuant to the terms of Trust Agreement
No. 7.
                  NOW, THEREFORE, in consideration of the premises the 
undersigned ("Subsidiary") hereby adopts Trust Agreement No. 7 and agrees to be
bound by its terms effective the day of , 199 . In addition:
                  1.   Capitalized terms in this Deposit Agreement shall have 
the meanings set forth in Trust Agreement No. 7 unless the context clearly
requires otherwise.
                  2.   The Subsidiary by its signature hereto irrevocably makes,
constitutes and appoints Cleveland-Cliffs its agents and its true and lawful
attorney in its name, place and stead, with the power from time to time to
substitute or resubstitute one or more others as such attorney, and to make,
execute, swear



<PAGE>   194




to, acknowledge, verify, deliver, file, record and publish any or all of the 
following:

                  (a)    All documents, agreements, requests, undertakings,
         certificates or other instruments which may be required or deemed
         desirable by Cleveland-Cliffs to effectuate the provisions of any part
         of Trust Agreement No. 7 and by way of extension and not in limitation
         to do all such other things as shall be necessary to continue the Trust
         under the laws of the State of Ohio.

                  (b)    Amendments to Trust Agreement No. 7 authorized or 
         approved in accordance with Sections 4, 9 and 14 thereof and all
         documents, certificates or other instruments deemed desirable by
         Cleveland-Cliffs or required in connection therewith.

         3.    It is expressly intended by the Subsidiary that the foregoing 
power of attorney is a special power of attorney coupled with an interest in
favor of Cleveland-Cliffs appointed as attorney-in-fact on the Subsidiary's
behalf, and as such shall be irrevocable and shall survive the Subsidiary's
merger, dissolution or other termination of existence.
         4.    In the event a Participant is transferred from the employ of the
Subsidiary to another Participating Employer, effective on the date of such
transfer, the Subsidiary may agree to assign assets with a value equal to, or
greater or lesser than, the value of the transferred Participant's account under
Section 7(b) of the Trust to the successor Participating Employer in exchange
for such Participating Employer assuming and being responsible for the
Subsidiary's liabilities and obligations to such transferred Participant under
the Plan.



<PAGE>   195



         5.    In the event a Participant is transferred from the employ of 
another Participating Employer to the Subsidiary, effective on the date of such
transfer, the Subsidiary may agree that upon the assignment by such
Participating Employer to the Subsidiary of assets with a value equal to, or
greater or lesser than, the value of the transferred Executive's account under
Section 7(b) of the Trust, in exchange therefor, the Subsidiary will assume and
be responsible for the Participating Employer's liabilities and obligations to
such participant under the Plan.
         6.    The Subsidiary agrees to bear its pro rata share (as determined 
by Cleveland-Cliffs) of any and all expenses of the Trust.
         IN WITNESS WHEREOF, the Subsidiary has caused this Deposit Agreement,
to be executed on its behalf on , 199 . 

                                                    Subsidiary

                                                    By:_________________________
                                                    Its:________________________

Accepted                                            CLEVELAND-CLIFFS INC

                                                    By:_________________________
                                                    Its:________________________


                                                AMERITRUST COMPANY, NATIONAL
                                                    ASSOCIATION



                                                By:_________________________
                                                Its:________________________


<PAGE>   196

                    THIRD AMENDMENT TO TRUST AGREEMENT NO. 7
                    ----------------------------------------


           WHEREAS, Cleveland-Cliffs Inc ("Cleveland-Cliffs") and AmeriTrust
Company National Association entered into Trust Agreement No. 7 (the
"Agreement") effective April 9, 1991, which Agreement was amended on two
previous occasions;
           WHEREAS, Key Trust Company of Ohio, N.A. (the "Trustee") is the
successor in interest to Society National Bank, which was the successor in
interest to AmeriTrust Company National Association; and
           WHEREAS, Cleveland-Cliffs and the Trustee desire to amend the
Agreement;
           NOW, THEREFORE, effective June 1, 1997, Cleveland-Cliffs and the
Trustee hereby amend the Agreement to provide as follows:
           1. The second sentence of Section 1(b) of the Agreement is hereby
amended to read as follows:
           "The term "Change of Control" shall mean the occurrence of any of the
           following events:
                      (i) Cleveland-Cliffs shall merge into itself, or
           be merged or consolidated with, another corporation and as
           a result of such merger or consolidation less than 70% of
           the outstanding voting securities of the surviving or
           resulting corporation shall be owned in the aggregate by
           the former shareholders of Cleveland-Cliffs as the



CLTAX01 Doc: 206085_1

<PAGE>   197



           same have existed immediately prior to such merger or
           consolidation;
                      (ii) Cleveland-Cliffs shall sell or otherwise
           transfer all or substantially all of its assets to any
           other corporation or other legal person, and immediately
           after such sale or transfer less than 70% of the combined
           voting power of the outstanding voting securities of such
           corporation or person is held in the aggregate by the
           former shareholders of Cleveland-Cliffs as the same shall
           have existed immediately prior to such sale or transfer;
                      (iii) A person, within the meaning of Section
           3(a)(9) or of Section 13(d)(3) (as in effect on the date
           hereof) of the Securities Exchange Act of 1934, shall
           become the beneficial owner (as defined in Rule 13d-3 of
           the Securities and Exchange Commission pursuant to the
           Securities Exchange Act of 1934) of 30% or more of the
           outstanding voting securities of Cleveland-Cliffs (whether
           directly or indirectly); or
                      (iv) During any period of three consecutive
           years, individuals who at the beginning of any such period
           constitute the Board of Directors of Cleveland-Cliffs
           cease,

                                      - 2 -



CLTAX01 Doc: 206085_1

<PAGE>   198


           for any reason, to constitute at least a majority thereof,
           unless the election, or the nomination for election by the
           shareholders of Cleveland-Cliffs or each director first
           elected during any such period was approved by a vote of at
           least one-third of the directors of Cleveland-Cliffs who
           are directors of the Company on the date of the beginning
           of any such period."

           IN WITNESS WHEREOF, Cleveland-Cliffs and the Trustee have
executed this Third Amendment at Cleveland, Ohio, this 23rd day of
May, 1997.


                                          CLEVELAND-CLIFFS INC


                                          By /s/ R. F. Novak V.P-H.R.
                                             ----------------------------------
                                             Title:



                                          KEY TRUST COMPANY OF OHIO, N.A.


                                          By /s/Kelley Clark
                                             ----------------------------------
                                                        Title: VP

                                             /s/ J.A. Radazzo
                                             ----------------------------------
                                                        Title: VP




                                 - 3 -



CLTAX01 Doc: 206085_1

ClubJuris.Com