The Rising Influence of Rising Affluence

[Democritus_of_Abdera]

Re CLF & Ohio Corporate Law Rules of Engagement...

When merging with Alpha in 2008, CLF submitted an SEC Form S-4 that outlined essential features of Ohio General Corporation Law & CLF Articles of Incorporation that might have relevance to today's change of control efforts by Casablanca... The list was extensive, but some items that seemed relevant to me are:

From: http://www.sec.gov/Archives/edgar/data/764065/000095015208007885/l32766csv4za.htm (starting at page 216)

BoD Rights to Issue Preferred Stock with Voting Rights

The Cleveland-Cliffs board of directors can, without approval of shareholders, issue one or more series of preferred stock. The board can determine the number of shares of each series and the rights, preferences and limitations of each series, including dividend rights, voting rights, conversion rights, redemption rights and any liquidation preferences and the terms and conditions of issue. In some cases, the issuance of preferred shares could delay, defer or prevent a change in control of Cleveland-Cliffs and make it harder to remove present management, without further action by Cleveland-Cliffs shareholders. Under some circumstances, preferred shares could also decrease the amount of earnings and assets available for distribution to holders of Cleveland-Cliffs common shares if Cleveland-Cliffs liquidates or dissolves and could also restrict or limit dividend payments to holders of Cleveland-Cliffs common shares.

Cumulative Voting

Ohio Law: The Ohio General Corporation Law provides that each shareholder of a corporation has the right to vote cumulatively in the election of directors if certain notice requirements are satisfied unless the articles of incorporation of a corporation are amended to eliminate cumulative voting for directors.

Cleveland-Cliffs. Neither the Cleveland-Cliffs articles of incorporation nor the Cleveland-Cliffs regulations eliminate the right of Cleveland-Cliffs shareholders to vote cumulatively in the election of directors.

Removal of Directors

Ohio. The Ohio General Corporation Law provides that a director may be removed from office by the board of directors if (i) such director has been found to be of unsound mind by an order of court, (ii) such director is adjudicated bankrupt, or (iii) such director fails to meet any qualifications for office. The Ohio General Corporation Law further provides that a director may be removed from office, with or without cause, by the holders of a majority of the voting power of a corporation, except that, in the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board of directors or of the class of directors of which the director is a part, unless the articles of incorporation provides otherwise. Directors serving on a classified board may only be removed for cause.

Cleveland-Cliffs. The removal of Cleveland-Cliffs directors is governed in accordance with the Ohio General Corporation Law. In contrast to Alpha, a Cleveland-Cliffs director may be removed by the board of directors.

Shareholder Action Without a Meeting

Ohio. The Ohio General Corporation Law provides that, except to the extent prohibited in the articles or regulations, any action that may be authorized or taken by shareholders of a corporation at a meeting of shareholders may be authorized or taken without a meeting with the unanimous written consent of all shareholders entitled to vote at such meeting.

Cleveland-Cliffs. Actions by Cleveland-Cliffs shareholders without a meeting are governed in accordance with the Ohio General Corporation Law. In contrast to Alpha stockholders, Cleveland-Cliffs shareholders may only take action without a meeting by unanimous written consent (however, Cleveland-Cliffs shareholders may amend the Cleveland-Cliffs regulations to permit action by less than unanimous written consent upon the approval of at least two-thirds of the outstanding shares).