OUR CORE VALUES IN ACTION
At Cliffs Natural Resources, we are committed to doing the right thing in all our business dealings. That means our first priority is to conduct business safely, honestly, transparently, and as a team while still focusing on our customers and creating value for our Company in a sustainable manner.
Focusing on our values contributes to our ability to overcome business challenges and will guide us when making difficult decisions in complex situations. Our values help us maintain the trust we have built with our stakeholders and with each other.
EMBRACING THE ONECLIFFS WAY OF DOING BUSINESS
The OneCliffs Way of Doing Business is our global code of business conduct and ethics (“The OneCliffs Way”). It outlines the behaviors we are all expected to follow to uphold our Core Values. When questions arise, we can refer to The OneCliffs Way and our related Company policies, and rely on internal expertise to confront issues and resolve dilemmas together. We must conduct all Company business in accordance with applicable laws and regulations, as well as The OneCliffs Way and Company policies.
The OneCliffs Way applies to all Company Directors, officers, and employees, and extends to anyone acting on our Company’s behalf, including consultants, agents, and third party representatives. Additionally, we expect that our suppliers, vendors, and service providers will follow these principles. Any reference to “employee” in The OneCliffs Way refers to all these individuals. References to “Company” or “Cliffs” mean Cliffs Natural Resources Inc. and all of its subsidiaries and affiliates worldwide. As our global code of business conduct and ethics, The OneCliffs Way does not stand alone—it is inspired by our Core Values and supported by the detailed framework of our policies and standards. We must always be mindful of our responsibility to be familiar not only with The OneCliffs Way, but with all supporting Company policies and standards relevant to our particular area of work.
OUR COMMITMENT TO THE LAW
As our Company continues to expand globally, we must know and follow all of the laws and regulations that apply where we do business. Our Core Values compel us to respect the local laws and customs where we operate and to educate ourselves about all applicable laws and regulations that apply to our operations. We do not make assumptions about which laws and regulations apply to our work. We investigate and ensure that we are always operating in a respectful and legal manner.
Deciphering the web of international, federal, state, and local laws can be a difficult task. While The OneCliffs Way cannot address every situation that would present legal or regulatory risks for our Company, by applying our Core Values, using good judgment and asking questions, we can determine the most appropriate way to conduct our business. You should direct any questions or concerns about the legal impact of any course of conduct to Cliffs’ Legal Department.
MAKING ETHICAL BUSINESS DECISIONS
We must always consider our Core Values when making a business decision. There are questions we can ask ourselves when considering a course of action, such as:
- Is this the right thing to do?
- Are my actions consistent with our Core Values, The OneCliffs Way and all other Company policies?
- Am I being respectful, honest and fair?
- After my decision is made, how will others view my actions?
- If my decision were reported in the news, how would I or the Company be perceived?
After asking yourself these questions and consulting The OneCliffs Way, if you still are unsure what to do, or have concerns, please speak with your supervisor or refer to the “Raising Your Concerns” section below for other resources.
While ensuring that our own conduct and business decisions are in harmony with The OneCliffs Way is a key responsibility, we must also speak up when we have a question or concern about a co-worker’s conduct or any situation where we feel we need guidance. We should be on the lookout for common signs of improper behavior discussed in this code of business conduct and ethics, such as harassment, unsafe work activity, respect for the environment, improper payments, and inaccurate record keeping, to name a few topics, and be ready to report concerns or ask questions when necessary. Our Company does not allow retaliation against anyone who makes a report in good faith, so you should never fail to report a concern out of fear you will be penalized for speaking up.
If you find that a local rule or law seems to conflict with the standards in The OneCliffs Way or our other Company policies, then you should follow the more restrictive of the two standards. If you are unsure what to do when there appears to be a conflict, then you should contact your supervisor or one of the other resources listed in the “Raising Your Concerns” section below.
RAISING YOUR CONCERNS
You are our eyes and ears—and our alert system. Raising concerns can help our Company improve processes and solve problems or concerns quickly and effectively.
If you become aware of a situation that may violate The OneCliffs Way, a Company policy or the law, you should report it to one of the resources listed here.
To make a report, you may contact any of the following resources:
- Your supervisor, or another manager you trust
- Human resources personnel at your operating site
- Members of the Ethics Committee
- Attorneys in Cliffs’ Legal Department
- The Ethics Helpline (callers may remain anonymous, if so desired)
- U.S. and Canada: 1-800-756-7427
- Australia: 1-800-881-011
- On-line Ethics Reporting Website (users may remain anonymous, if so desired)
When a question or report is made, our Company will respond promptly and appropriately, and all reports will be treated confidentially to the extent possible.
Cliffs does not allow retaliation against employees for reporting good faith concerns. You may report without fear of retaliation or any negative impact on your employment. Additionally, you will never face any form of retaliation for making a report that turns out not to be true as long as you come forward honestly and in good faith. Anyone who takes action against another employee for reporting a concern or participating in an investigation in good faith will be subject to disciplinary action, up to and including termination.
Cliffs ensures that all investigations are conducted in a consistent, comprehensive and confidential manner that complies with applicable laws. All employees are expected to cooperate fully with any such investigation and to provide complete, accurate, and truthful information as provided for under applicable law. When the investigation is completed, our Company will take appropriate corrective or disciplinary action, where warranted, in accordance with local laws and internal procedures. In some situations, you may be updated on the actions taken to resolve your report.
Each of us has an obligation to report matters that we believe involve a violation of The OneCliffs Way, Company policy or the law. We must report any of these activities as soon as possible using the reporting methods detailed above.
OUR ETHICS COMMITTEE
Our Company has a committee responsible for ensuring that we continue to operate in accordance with all applicable laws, rules, and regulations, and assisting us all in establishing and maintaining the very highest ethical standards for the organization.
Our Company’s Ethics Committee is comprised of its Chief Executive Officer, Executive Vice President – Human Resources, Executive Vice President & Chief Financial Officer, Vice President & Chief Legal Officer, and an Executive Vice President representing operations. One of the Committee’s primary roles is investigating reported violations of The OneCliffs Way and recommending appropriate discipline for infractions. The Committee also informs the Chief Executive Officer of all violations involving material financial matters. As noted in the “Raising Your Concerns” section above, the Committee is also a point of contact for employees who wish to report a concern.
FURTHER EXPECTATIONS FOR SUPERVISORS
Supervisors at Cliffs lead by example with regard to our Core Values and the standards expressed in The OneCliffs Way and our Company policies. A key aspect of our culture is that we are all encouraged to speak up and voice concerns, so this is an important message for supervisors to communicate to their supervised employees. All supervisors should also maintain and advertise their open door policy regarding any and all concerns. As a supervisor at Cliffs, your leadership role includes maintaining effective communication with your supervised employees about all workplace issues, including compliance and ethics. You are the most important communication resource we have regarding the reporting of issues and concerns and you must do your utmost to remain accessible, encouraging, and responsive to issues raised by employees.
Supervisors must also ensure they promptly and accurately escalate any reports or questions to the proper personnel within Cliffs. Supervisors must ask questions and assure themselves of the accuracy of any advice or instruction they provide to supervised employees with regard to The OneCliffs Way, Company policies, or the law. If unsure about any answer or whether a question should be escalated, a supervisor should immediately seek advice or counsel from the resources listed above in the “Raising Your Concerns” section.
Supervisors have a central role in promoting training and career development for supervised employees. Supervisors must take an active role in assuring that supervised employees have received the training they need to work safely, ethically, and effectively. Supervisors should encourage supervised employees to ask questions and discuss concepts from training and issues that arise in our daily business activities.
Supervisors at Cliffs have a duty to demonstrate our Core Values to those they supervise through their own actions and their communications so that our shared efforts to promote a culture of safety, honesty, and transparency will be a continuing success.
SAFETY AND HEALTH: MAINTAINING AN INJURY AND INCIDENT FREE WORKPLACE
Safety is our first Core Value, and our continuing goal is zero harm. We are committed to full and consistent implementation of the highest safety standards to ensure an injury-free and productive work environment everywhere we operate. Visible and uncompromising leadership—and full participation by all employees—are necessary to sustain our safety culture. Without question, maintaining a safe work environment is the first responsibility of every employee at all levels.
Our success depends on a healthy and productive workforce and we are committed to protecting our employees from occupational illnesses. Prevention of occupationally induced injuries and illnesses will be given precedence over operating productivity whenever necessary. To the greatest degree possible and keeping with the highest standards, we will provide all mechanical and physical safeguards required for personal safety and health, including personal protective equipment and training in world-class safety and health practices.
We comply with all applicable health and safety rules and regulations, as well as all internal safety procedures within our areas of operation. We employ safe work practices and avoid any risk to our fellow employees, ourselves and others. To be successful, our safety and health program requires full cooperation between supervisors and employees, and between co-workers. Only through a cooperative effort can a safety and health program in the best interest of all be maintained. If we have any questions at all about what the proper, safe procedure is, then we ask.
We are all responsible for exercising good judgment to prevent accidents and injuries, and we must also always be on the lookout for unsafe conditions at any worksite. If you know of or suspect any unsafe situations or conditions, you must immediately alert your supervisor of the situation. Additionally, if there are any injuries or accidents, you must immediately report that information to your supervisor.
PROHIBITION OF DRUGS AND ALCOHOL
We depend on each other to have clear minds so that we can properly perform our duties on the job. Abuse of drugs or alcohol limits our ability to do our work safely, effectively, and productively. We maintain a zero tolerance policy and strictly prohibit the use or possession of illegal drugs or alcohol in the workplace or while working for our Company. Cliffs will not let someone work while under the influence of legal drugs or prescribed medications if it creates a safety risk or impairs that employee’s performance. For further information, see our Company’s Drug and Alcohol Policy.
VIOLENCE AND CRISIS MANAGEMENT
As part of maintaining a positive, productive, and safe work environment, we must never engage in or tolerate any form of violence. This includes any threats, intimidation, or acts of violence. If you know of a situation in which workplace violence has happened or has been threatened, you should immediately report your concerns to your supervisor. If you believe someone is in immediate danger, do not hesitate to contact the local authorities.
Unforeseen events such as natural disasters can challenge our ability to respond, and that is why we all must be knowledgeable and prepared to act on any applicable local crisis management plans. It is also every employee’s responsibility to participate in any crisis management drill or other system testing that may be part of your local crisis management plan.
RESPECT: UPHOLDING THE RIGHTS AND PROMOTING THE DIGNITY OF OUR FELLOW EMPLOYEES
NO TOLERANCE FOR HARASSMENT OR INTIMIDATION
We all have a right to work in an environment where everyone is treated with dignity, fairness, and respect. To maintain a positive work environment, we must each do our part to keep our workplace free of harassment. Harassing, intimidating, and bullying our fellow employees is simply not tolerated at Cliffs. Such behavior includes remarks, gestures, or conduct relating to a person’s race, color, religion, gender, age, mental or physical disability, veteran status, national origin, sexual orientation, or any other characteristic protected by applicable law.
Harassment can be non-sexual or sexual in nature. Non-sexual harassment may include offensive comments, jokes, or pictures related to any of the topics listed above. Sexual harassment includes conduct such as repeated unwanted advances, inappropriate sexual jokes, sexually suggestive comments or questions, inappropriate touching, leering, requests for sexual favors, and inappropriate comments about another’s appearance.
In order for us to create and maintain a positive and productive workplace we must not only refrain from harassing or intimidating conduct, we must also promptly report any such behavior we observe or experience. If you have a question or concern to report, contact your supervisor or follow the “Raising Your Concerns” instructions contained in The OneCliffs Way. For additional information, see our Non-Harassment and Equal Employment Opportunity Policy.
DIVERSITY AND NON-DISCRIMINATION
Diversity within our organization is one of our primary strengths. Our different perspectives and experiences should never divide us. Sharing a diversity of opinions and ideas fosters innovative problem-solving and increases productivity. Our differences make us a stronger team.
To this end, we must provide an inclusive work environment that promotes respect for all of our co-workers, and one that reflects the diversity of the communities in which we operate. Our Company provides equal opportunities, which means that we do not make employment-related decisions or discriminate against anyone on the basis of race, color, religion, gender, age, mental or physical disability, veteran status, national origin, sexual orientation, or any other characteristic protected by applicable law.
RESPECT FOR HUMAN RIGHTS
Our respect for each other and our commitment to acting with integrity around the world means that we always support individual human rights. Our Company provides reasonable working hours and fair wages for those who work on our behalf. Cliffs has a zero tolerance policy for the use of child labor, forced labor, or human trafficking practices, and we will not knowingly do business with any subcontractors, business partners, suppliers, and other third parties who violate this policy.
Respect for human rights also means looking out for the safety and well-being of all employees, others working on Cliffs’ behalf, and members of the communities where we operate.
If you have reason to believe a Cliffs’ subcontractor, business partner, supplier, or other third party is engaging in child labor, forced labor or human trafficking practices, report the misconduct immediately to your supervisor or follow the “Raising Your Concerns” instructions outlined above. If you have a concern or question about whether human rights are being negatively affected by our Company’s operation, you should immediately report this in the same way. If you have any questions regarding Cliffs’ commitment to upholding high standards with regard to human rights, please consult our Human Rights Policy.
BUILDING RELATIONSHIPS IN THE COMMUNITIES WHERE WE OPERATE
Our goal is to make sure that Cliffs’ impact on the communities where we operate is a positive one. As we expand globally, we do our best to accommodate the different cultures, traditions, and perceptions
Our commitment to establishing mutually beneficial relationships in local communities includes ensuring consultation with those communities before we open new operations, while running existing operations, and when closing down operations at the end of their productive lives. We show this commitment through collaborative engagement, mutual agreements, and open and respectful communications.
SAFEGUARDING THE ENVIRONMENT
We are committed to extracting and processing the earth’s mineral resources in a responsible way that minimizes impacts on the environment and local communities. As a Core Value, engaged and proactive environmental stewardship is expected of all our staff and managers at all levels. We recognize that excellent management of our operations, with the goal of minimizing our environmental footprint, is essential to our business success and to maintaining our social license to operate.
Our Company is fully committed to meeting and exceeding all requirements under local environmental laws, rules, and regulations at every one of our work sites. We also require full compliance by contractors and other third parties operating at our sites. We integrate evaluation of environmental concerns into every stage of business planning—from exploration, to mine development, to active operations and reclamation, as well as analysis of potential acquisitions and divestitures of assets. At all times, our Company seeks to prevent, decrease, and remedy disturbances to the environment. We regularly establish targets and objectives for our environmental performance, and we are each responsible for knowing how our duties impact these specific goals.that we encounter during our project and operational planning. We are particularly mindful and respectful of the unique and important interests that indigenous, Aboriginal, and First Nations peoples have in the land, waters, and environment.
Additionally, all of us must speak up if we have questions or concerns involving the environmental impact of our Company’s current and proposed operations. If you have such questions, you should speak to your supervisor, to the Vice President – Global Environmental Affairs and Counsel, or to one of the contacts listed above in the “Raising Your Concerns” section.
CONFLICTS OF INTEREST
Our Core Value of trust, respect, and open communication compels us to be transparent with our Company and each other about business arrangements or other conflicts of interest. We must ensure that our personal interests and activities do not conflict with our responsibilities to the Company. Even the appearance of a conflict must be avoided. Examples of “conflicts” could include owning a financial interest in a Cliffs competitor, having a personal or family interest in a transaction with the Company, outside work or employment that presents a conflict to Cliffs, or acceptance of personal benefits for yourself or a family member from a Company vendor, supplier, or service provider. If a conflict or potential conflict arises, you must disclose it promptly through one of the mechanisms described in the “Raising Your Concerns” section and seek to resolve it immediately.
WORKING WITH FAMILY AND FRIENDS
While our policy does not prohibit relatives from working for our Company, it is a conflict of interest when one employee has influence or control over the job responsibilities, performance evaluation, compensation, or promotion of a family member, relative, personal friend, or romantic partner.
If we seek to hire or engage a family member, personal friend, or romantic partner, or his or her company, to provide goods or services to our Company, we must first disclose the circumstances to the Ethics Committee.
OUTSIDE EMPLOYMENT OR FINANCIAL INTEREST IN OTHER BUSINESSES
We owe a duty to each other and our Company to carry out our duties properly as an employee. Under no circumstances should outside employment compete or interfere with our responsibility to Cliffs, compromise the quality of our work or involve the use of Company time or resources. Nor should any outside employment, paid or not, ever imply sponsorship or endorsement by the Company or otherwise risk placing Cliffs in a bad light.
To guard against a conflict, employees must inform their manager before engaging in outside employment for which they receive compensation. Managers should discuss these situations with human resources to determine if a conflict exists. Any questions should be escalated to the Legal Department.
Individually, we must ensure we don’t have an ownership interest in or are employed by a Cliffs customer, supplier, partner, or provider of goods or services, or any business that contracts with these entities. This type of relationship must be reported to the Ethics Committee to determine the appropriateness of the arrangement. For further details, see our Company’s Conflicts of Interest Policy.
If you are considering serving on the board of directors for an outside for-profit company, such service requires advance approval, particularly in circumstances where the company in question does business with Cliffs. You should contact the Ethics Committee before accepting such a position. Where appropriate, the Chief Legal Officer will review your request with the full membership of the Executive Leadership Team. While positively impacting our communities by serving on a board of directors for a non-profit organization is encouraged and does not require prior approval, you may only accept this position if it does not negatively impact your ability to perform your duties for Cliffs.
RELATED PARTY TRANSACTIONS
Our Company has a separate policy that applies when certain employees or members of the Company’s Board of Directors engage in business relationships that include the Company as a party. Should you be considering such an arrangement, you should consult this policy and address any questions to the Legal Department. Do not initiate any business relationship of this kind until it has been approved as sanctioned in the Related Party Transactions Policy.
GIFTS, ENTERTAINMENT, & OTHER BENEFITS
CUSTOMERS, SUPPLIERS, AND SERVICE PROVIDERS
Small, low-value gifts, business lunches or dinners, and other minor courtesies can help to strengthen our relationship with current or prospective business partners. Although such courtesies are an important tool for building relationships, we must also ensure that they do not improperly influence our business decisions or the decisions of our partners. Some simple guidelines for determining the reasonableness of a gift, meal, or entertainment provided to you or your family, or that you intend to provide to a current or prospective customer, supplier, or service provider, include:
- Do you frequently exchange gifts or entertainment with this partner?
- Is it worth more than a modest or nominal value?
- Is it solicited?
- Does the gift include cash or cash equivalents (such as gift cards)?
- Would this be unusual for similar business relationships?
- Is this in violation of any applicable laws or regulations?
If your answer to any of these questions is “yes,” then you should not accept nor provide such a gift and you should seek guidance from your supervisor, the Legal Department, or the Ethics Committee immediately.
When accepting or providing meals, entertainment, or other gifts or benefits, we must ensure that its purpose is directly related to the business relationship between our Company and the other individual or organization involved. For example, should a vendor offer to take you to dinner or to a sporting event, it should be related to our mutual business relationship and the vendor’s representative should be present. Additionally, there should be no occasion when a member of your family participates in such an event with a business partner unless you or another Cliffs employee involved in the business relationship is present.
Gifts and entertainment that we share with our business partners must never influence our judgments or actions in performing our duties for the benefit of the Company. We should avoid even the appearance of inappropriate influence. We must each use our best judgment when giving or receiving gifts and other benefits so that we do nothing to create even the appearance of impropriety.
The business purpose and details of the receipt or provision of gifts, entertainment, and other benefits must be accurately and fairly described on our expense reports and other Company books and records.
TRAVEL AND LODGING EXPENSES
In some situations, one of our business partners may offer to pay for our travel or lodging expenses. Accepting such an offer from a business partner may be acceptable in certain limited circumstances where there is a clear and documented business purpose. You must have such reimbursement or gift of travel or lodging approved, in advance, by the Ethics Committee.
We must be particularly cautious when solicited to provide gifts or entertainment to government officials. We do not want to create the impression that we seek to influence the decision-making of any government employees. Giving gifts or entertainment or providing travel to government officials can create serious criminal and civil liability for both Cliffs and individual employees.
Federal and state laws within the United States and the laws of countries and regions outside the United States strictly govern the provision of such benefits to government officials or employees (see Anti-Corruption below). Certain laws require that we certify our understanding of government gift-giving rules. We must not provide gifts, travel, meals, or anything else of value to government employees unless doing so is clearly allowed. When approached by a government official, or when considering a gift to a government official, you must first discuss and receive prior written approval from the Legal Department or the Vice President – Government and Public Affairs as set forth in our Foreign Corrupt Practices Act and Anti-Corruption Policy.
If you have any questions about providing gifts or other benefits to government officials or employees, seek guidance from the Legal Department or the Vice President – Government and Public Affairs.
We compete across the globe, but we do not compete through bribery and corruption. Part of our commitment to the communities in which we operate is to discourage corruption and never facilitate it. We also must be mindful that even the appearance of impropriety through payoffs, kickbacks, and other similar activities can seriously harm our Company’s reputation and lead to legal risk.
We must never provide a bribe or allow anyone else to provide a bribe on behalf of our Company. A “bribe” is anything of value and may include money, gifts, favors, entertainment, services, employment, discounts/rebates, or family benefits that may be viewed as an effort to influence actions or decisions, an attempt to obtain or retain business or an effort to acquire an improper advantage.
PROHIBITION OF BRIBERY OF GOVERNMENT OFFICIALS
We must be circumspect and transparent in our relationships with government officials. We must comply with all anti-corruption and anti-bribery laws in every location where we operate, and we must never pay or receive a bribe. We must all be aware that the U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits bribery of non-United States government officials. This law applies well outside the borders of the U.S. and governs the conduct of all our employees and others acting on our behalf wherever in the world they may be located. This law and other anti-bribery laws throughout the world provide for severe penalties for organizations and individuals involved in corrupt practices.
Those of us whose work involves contact with government officials, or who retain third parties who come into contact with government officials, must be familiar with the restrictions involving official bribery. In addition to political office holders and candidates and employees or representatives of government agencies or departments, some countries’ laws define “government officials” to include employees of any state-owned or stated-controlled entity, members of royal families, and employees of public international organizations like the United Nations and the World Bank.
In many countries, small payments called “facilitation” or “grease” payments are expected to help ensure that government officials perform ministerial, non-discretionary tasks that they are supposed to perform as part of their routine job function. While these types of payments are sometimes considered normal business practices, they usually violate local laws. Our Company prohibits making facilitation payments.
PROHIBITION OF COMMERCIAL BRIBERY
Additionally, we may not engage in “commercial bribery.” This means attempting to bribe our customers, partners, suppliers, service providers, or anyone working on their behalf, with intent to influence their business decision-making.
Under no circumstances do we offer or accept a “kickback.” When conducting business on behalf of our Company we never agree to return, nor accept, any sum of money to or from another party in exchange for making or arranging business transactions. We also do not steer business opportunities to another party in exchange for non-monetary personal gain, such as gifts, entertainment, travel, personal services, or other things of value.
We must never work with third parties or other intermediaries who divert funds for any corrupt purpose, such as bribery, kickbacks, or improper payments. We can be held responsible for the actions of our business partners, and Cliffs only works with partners who follow ethical standards like our own.
Because anti-corruption laws and issues are extremely complex, please seek guidance from the Legal Department if you have any questions or believe any of these guidelines have been violated. If you have any doubt about the legitimacy of any payment you have been offered or requested to make, you should contact the Legal Department and review the Company’s Foreign Corrupt Practices Act and Anti-Corruption Policy.
Our Core Values include customer focus and creating economic value. These values need never conflict. Our Company earns business and succeeds by outperforming our competition fairly and honestly through development of leading products based on design and performance, and never through unfair business practices.
We must abide by all applicable competition laws (also called “antitrust” laws) in the countries where we operate. Each of us is responsible for being aware of the competition laws and regulations that apply to our job function and complying with them fully. Antitrust laws provide for significant criminal and civil penalties for both individuals and organizations.
Competition laws are varied and complex, but most forbid entering into formal or informal agreements with competitors that may restrain trade. Some examples of prohibited conduct include price fixing agreements with competitors, bid rigging with competitors, or dividing or allocating markets, territories, or customers with competitors.
You may find yourself in a situation where a competitor attempts to discuss one of these topics with you. If this happens, you must stop the conversation immediately and report the incident to the Legal Department. We must be cautious when interacting with competitors. We must not cooperate—or even appear to cooperate—with competitors. We must avoid all conversations about commercially sensitive information with representatives of our competitors. Commercially sensitive information includes information that is not publicly known (including information that is shortly to be made public) relating to sales, prices, contract negotiations, capacity, production, costs, profit levels, supply information, trade terms and credit terms, exploration, commercial strategies, mining plans, intentions to bid or not to bid, or market share and customers.
Competition laws also generally prohibit entering into formal or informal agreements with suppliers or customers that may restrict competition, such as boycotting particular customers or suppliers.
If you have any questions regarding antitrust or competition law please refer to the Antitrust Policy and contact the Legal Department.
Integrity and individual accountability compel all of us to refrain from illegal insider trading. We cannot buy or sell stock or other securities of a company while aware of or in possession of material, nonpublic information about that company. Similarly, we cannot convey material, nonpublic information, other than on a need-to-know basis, to anyone else—such as family, friends, colleagues or co-workers—until that information has been publicly released. Providing this information to others is called “tipping” and is strictly prohibited.
Information is “material” if a reasonable investor would consider it important in determining whether to buy, hold or sell a company’s stock. Information is “nonpublic” if it has not been publicly released by the company or is not otherwise publicly available. Such inside information can be either positive or negative and can include information regarding future earnings or losses, a pending or proposed merger or acquisition, major dispositions or discoveries, executive management changes, labor negotiations, securities offerings, dividend actions, and other significant company transactions.
Trading on inside information or providing such information to third parties to trade carries significant criminal and civil liability for those involved. If you have any questions as to whether the information you possess qualifies as inside information, or you have any questions about our Company’s policy on inside information, please refer to the Insider Trading and Material Inside Information Policy or contact the Legal Department. Further, Directors, certain officers, and other key employees must refer to the policy for additional restrictions, including receiving prior approval before purchasing or selling Company securities.
EXPORT AND TRADE CONTROLS
As a U.S. based company that operates around the world, Cliffs must comply with all applicable export and trade control laws and regulations. We must understand how these laws and regulations affect the movement of products and technologies across country borders. Before engaging in exporting activity, you must verify the eligibility of both the location of delivery and the recipient. You also must obtain all required licenses and permits, and pay all proper duties.
We must also be mindful that certain nations, organizations and individuals are subject to sanctions. We must not engage in the transfer of assets, monetary payments, or provision of products or services with affected countries or with affected individuals or organizations. We must know and follow applicable restrictions wherever we are doing business.
RESPONDING TO BOYCOTT REQUESTS
We may be approached to boycott certain countries, companies, or other entities. Under the law we cannot cooperate with any request concerning any boycotts not initiated by the U.S. government or any related restrictive trade practices. This means we cannot take any action, furnish any information, or make any declaration that could be viewed as participation in an illegal foreign boycott. There are severe penalties for violation of these laws. We are also required to report any suspected boycott requests to the U.S. government. Should you receive such a request you should immediately notify the Legal Department.
You should consult the Export and Trade Controls Policy and contact the Legal Department if you have any questions about exports and trade controls, sanctions, or boycotts.
Open communications with our third parties and our customers helps us to keep our business practices transparent so that there is never any question that funds transferred to, or through, Cliffs have an illicit origin. All of us—especially those who handle cash for our Company—must actively guard against the use of our products, services, or operations for purposes of money laundering or other criminal activity. Money laundering is the process through which entities or individuals attempt to make the source of illegal funds look legitimate by concealing the true origin of the funds. Other criminal activity includes attempts to conceal the destination or final use of funds that have a legitimate or illegal origin. We should be vigilant in identifying irregular payments, such as payments made in currencies other than the currency specified in a contract, payments made by individuals who are not parties to a governing contract, requests for payments in cash or cash equivalents (like money orders or traveler’s checks), or requests for payments in amounts greater than what is owed. For further information, see the Anti-Money Laundering Policy or contact the Legal Department.
SAFEGUARDING OUR COMPANY’S ASSETS
We have a shared responsibility to work as a team and properly use our Company assets for legitimate business purposes.
PHYSICAL PROPERTY AND FACILITIES
We all share a role in protecting our Company’s physical property, including facilities, equipment, vehicles, computers, and funds from theft, misappropriation, and damage. These assets are to be used for legitimate business purposes and not for our personal benefit or for the benefit of third parties.
CONFIDENTIAL AND PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY
We must safeguard confidential and proprietary information. This includes any information that could be of use to competitors or could bring harm to our Company if disclosed, such as contract documentation and corporate strategies. Additionally, we must not disclose such information to our fellow employees who do not have a business need to know it, or are not authorized to access it. Confidential information may only be disclosed if authorized and subject to an appropriate confidentiality agreement. If you discover or suspect the unauthorized use or disclosure of confidential information, you should notify your supervisor or the Legal Department of the situation immediately.
Our Company’s intellectual property, including any copyrights, patents, trademarks, service marks, trade secrets, design rights, logos, know-how, and other intangible industrial or commercial property is a valuable shared asset that we must also protect.
Please refer to the Confidential Information Policy or contact the Legal Department if you have any questions.
COMPANY COMPUTER SYSTEMS AND ELECTRONICS
We work for Cliffs and understand that the Company’s electronic assets should be used for the purpose of conducting Company business. While our Company permits reasonable personal use of its electronic assets, we must all use good judgment in exercising this privilege and never allow such personal use to interfere with the performance of our work.
Cliffs reserves the right to monitor, restrict, and access any use of computer systems and electronics. All communications we make using our Company’s electronic assets, including email communications, are considered Company property and the Company reserves the right to monitor, retrieve, and distribute these communications. You should assume no expectation of privacy in using these systems.
We all share the responsibility for keeping Company and customer information secure. When using electronic resources such as Company laptops or desktops, always ensure these resources are secure and that access to the data contained within these resources is password protected or otherwise physically protected at all times. Contact your supervisor or the Chief Information Officer if you believe an electronic resource has been compromised.
Those of us who work in the Company’s office located in the People’s Republic of China and those who travel into China for work must also comply with the information technology guidelines contained in our Company’s People’s Republic of China Safety and Security Policy.
If you have any further questions about these and related topics, please refer to the Information Technology End-User Policy or consult your supervisor.
SAFEGUARDING OUR EMPLOYEES’ PERSONAL INFORMATION
Cliffs is committed to the privacy of employee information, and we protect our fellow employees’ information by taking care in collecting, storing, securing, and using it. When taking any of these actions, we must do so in accordance with all applicable privacy laws, wherever we are doing business.
Whenever our job responsibilities include the use of employee data, we have a duty to know and comply with the privacy and data protection laws that apply to our work. We must also take care to share such information only with others who have a business need to know it.
If you have any questions about employee data or personal information, please contact your supervisor or the Legal Department.
RESPECT FOR THE CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY OF OTHERS
Just as our Core Values lead us to protect our Company’s confidential information and valuable intellectual property, we must also protect the confidential information or IP data entrusted to us by others, such as customers, suppliers, and other third parties. Oftentimes, such information is provided to us under strict confidentiality agreements. We protect our partners’, customers’, and suppliers’ information just as we protect our own—and we expect the same courtesy from them. If you have any questions about the confidential or IP information of others, or suspect such information has been inappropriately released, you should contact the Legal Department.
Our Company is committed to providing transparent and respectful communications to the public and our stakeholders. Our external communications must be accurate and consistent. For this reason, communicating with the media, analysts, and investors is the sole responsibility of designated Company spokespersons. Unless your designated responsibilities include external communications, you must refrain from making any statements or providing any responses to outside inquiries. Please direct any such inquiries or any questions regarding external communications to the Investor Relations and Global Communications Department.
Our need to provide consistent and completely accurate information is particularly important when dealing with media inquiries. If you are approached by a reporter or other media representative, be cordial but defer any questions or requests for information to our Investor Relations and Global Communications Department and then contact that department to provide any background and information about your interactions with the media representative.
Likewise, if you are contacted by an investor, a potential investor, or a securities analyst with questions or inquiries about our Company or any of our operations, be polite but defer any questions or requests for information to our Investor Relations and Global Communications Department and then contact that department to provide any background and information about your interactions with the investor or analyst.
Social media can be a powerful and creative tool for building teamwork and providing open communication, as long as we use it responsibly. Any time we use any social media, we should do so with our Core Values of respect and integrity in mind. All official Company social media postings must be made only by designated Company spokespersons. Those of us who do not have this role should not post to social media as if we are speaking on behalf of the Company.
We must never use social media irresponsibly, and we should always maintain a respectful and professional demeanor in any forum we find ourselves. We should never speak on behalf of our Company as an agent or representative. Should you encounter negative messages or requests for official Company participation in any social media, refer these issues directly to the Legal Department. Additionally, under no circumstances will we use social media to distribute confidential or proprietary Company information. We should also never allow our use of social media to conflict with our responsibilities for our Company, or our ability to complete our regular work duties.
POLITICAL ACTIVITIES AND CONTRIBUTIONS
Our shared commitment to the communities we operate in extends to encouraging all Cliffs employees to participate in the political activities of our choice. We may only participate in such activities on our own time, however, and at our own expense, never using Company resources for political activities and never giving any endorsements or indications of support on behalf of the Company to candidates for political office. Cliffs does not reimburse employees for political contributions.
As a good corporate citizen, our Company may engage in political activities subject to all applicable laws and regulations. Our Company conducts these activities with the highest regard for applicable campaign finance regulations and election laws. One example of Cliffs’ activities is maintenance of political action committees in the United States that solicit voluntary contributions from a restricted class of employees and distribute those funds to select candidates for elected office. Other types of political engagement include contributions relating to non-partisan referendum issues and to section 527 organizations, as well as more direct forms of political giving in jurisdictions where permitted. Corporate-oriented political contributions may not be made without the express approval of the Vice President – Government and Public Affairs.
In order to represent our interests, the Company engages in direct and indirect lobbying activities in compliance with federal, state and provincial laws and regulations. While our Company maintains a strong, active voice on public policy issues that affect our industry and the communities where we operate, we must always do so in line with our Core Values of respect, integrity, and transparency. If you have any questions about individual or Company political activities, contributions or lobbying, please contact the Vice President – Government and Public Affairs or the Legal Department.
As with any third party we work with, we must treat our relationships with any government entities in national and local jurisdictions around the world with respect, trust, and transparency.
During the normal performance of our duties for Cliffs, we may receive a request from a government official to participate in an investigation or provide information or documentation. Should you receive such a request or are notified of an impending legal action, immediately inform your supervisor and the Legal Department.
We cooperate with all legitimate official inquiries while asserting our basic legal rights and taking appropriate steps to protect our confidential information. Under no circumstances do we conceal, alter, or destroy information or documentation requested by government entities, nor do we attempt to impede or delay any investigation.
There may be additional, special considerations when we are working with the government, including additional rules for interacting with government employees and representatives. Those of us who work with government employees or representatives must familiarize ourselves with any additional policies and practices and investigate any special considerations before we start any new projects. If you have any questions about this, please consult your supervisor or the resources listed in the “Raising Your Concerns” section of The OneCliffs Way.
GIFTS AND ENTERTAINMENT FOR GOVERNMENT EMPLOYEES
As noted in the “Gifts, Entertainment, & Other Benefits” and “Anti-Corruption” sections of The OneCliffs Way, we must be cautious when solicited for or otherwise providing gifts and entertainment for government officials. If you have any questions about the appropriateness of any gift or form of entertainment, consult your supervisor or the Legal Department.
OUR RESPONSIBILITY TO MAINTAIN ACCURATE BOOKS & RECORDS
We take our responsibility to provide business records that are transparent and accurate very seriously. As employees of a publicly traded company, we understand that we have an obligation to provide our investors and the government with complete, accurate, and understandable information about our business in a timely manner. We must maintain accurate and complete books and records in order to meet this obligation and safeguard investor confidence. We understand that our books and records must fully and accurately reflect our business transactions in accordance with our system of internal controls, as well as applicable financial and accounting standards.
We all understand it is a shared responsibility for us all to be accountable for the financial records of our Company, and if we become aware of any inaccurate, incomplete, or fraudulent books or records, it is our responsibility to report that information to our supervisor or the resources listed in the “Raising Your Concerns” section of The OneCliffs Way.
We also fully comply with the requests of our internal and external auditors and seek to provide them with the most accurate and timely information we can. We never seek to mislead or improperly influence any investigation, audit, or inquiry.
When we are responding to other external reporting requirements, such as periodic filings with the Securities and Exchange Commission, we all do our utmost to ensure the accuracy and timeliness of those reports. When we are asked to provide, review, or certify any information that will be used in such reports we respond completely, accurately, and timely. If you believe that information that has been provided is somehow incomplete, inaccurate, or otherwise misleading, it is your duty to report it to your supervisor or a resource listed in the “Raising Your Concerns” section of The One Cliffs Way.
Managing our records is central to our Core Values of open communication, trust, and accountability. Keeping accurate and organized records also is key to building trust with our customers, regulators, and shareholders. Such records include all electronic, email, imaged, and paper documents created, received, and maintained by our Company for legal, regulatory, accounting, or business purposes.
We all must follow the records management policies and retention schedules in the locations where we operate, and we must always observe any legal holds. A legal hold applies to records connected with actual or anticipated litigation or audits and is a request to preserve all records related to specific topics such as a particular customer or project. A failure to preserve relevant records can lead to adverse consequences for the Company.
We do not tamper with or destroy records prior to their expiration dates. The procedure for determining document expiration dates is described in the Records Retention Policy. If you have questions about matters related to records retention, please consult the Records Retention Policy or contact your supervisor or one of the resources listed in the “Raising Your Concerns” section above.
CERTIFICATIONS AND DISCLOSURES
Upon initial hire, employees must certify that they have received, understand, and will comply with The OneCliffs Way of Doing Business . . . our global code of business conduct and ethics. The Human Resources Department will maintain a copy of the certification. Annually, each member of our Company’s Board of Directors and all officers and employees shall certify their understanding and compliance with The OneCliffs Way, timely complete any on-line or other compliance and ethics related training that our Company requires, and provide any other certifications or disclosures required by the Company.
Employees who do not to comply with The OneCliffs Way of Doing Business . . . our global code of business conduct and ethics are subject to disciplinary action, including termination or other legal action. Our Company shall cease transacting business with a supplier or agent who violates The OneCliffs Way.
We must all follow the guidance provided in The OneCliffs Way. If you would like to seek a waiver of this code of business conduct and ethics, you must make full disclosure of your particular circumstances in writing to the Ethics Committee for approval before you engage in any activity that would violate The OneCliffs Way.
Officers or members of the Board of Directors who believe that a waiver is necessary must request formal approval from the Board of Directors.
If such a waiver is granted, the circumstances will be promptly made public as required by law and stock exchange rules and regulations.
Our good name and reputation depend, to a very large extent, upon each of us taking personal responsibility and making a conscious effort to live up to our Core Values, to The OneCliffs Way of Doing Business . . . our global code of business conduct and ethics, and to related policies and guidelines. This is a shared commitment that we all make to one another and to our stakeholders that will form the foundation for a strong and sustainable company for many years to come.
The OneCliffs Way of Doing Business . . . our global code of business conduct and ethics will be posted on the Company’s website and made available upon request sent to the Company’s Investor Relations Department.
Cliffs Natural Resources Inc. and its consolidated subsidiaries and associated companies, including partnership mines (collectively, the “Company”).
PURPOSE AND SCOPE
The purpose of this Insider Trading and Material Inside Information Policy (this “Policy”) is to promote compliance with applicable securities laws by the Company and all of its Directors, officers, employees, consultants or contractors.
1. This Policy applies to all members of the Company’s Board of Directors (the “Board”) and all officers and employees of, and agents, advisors, consultants and contractors to, the Company who receive or have access to Material Non-Public Information regarding the Company or third parties (collectively, the “Insiders”). Included in the definition of Insiders are Related Persons.
- A “Related Person” includes your spouse, your minor children, and anyone living in your household; partnerships in which you are a general partner; corporations in which you either singly or together with other “Related Persons” own a controlling interest; trusts of which you are a trustee, settlor or beneficiary; estates of which you are an executor or beneficiary; or any other group or entity where the Insider has or shares with others the power to decide whether to buy securities. Although a person’s parent, child or sibling may not be considered a Related Person (unless living in the same household), a parent, child or sibling may nevertheless be a “tippee” for securities laws purposes.
2. The definition of an Insider is transaction specific; that is, an individual is an Insider with respect to each item of Material Non-Public Information of which he or she is aware.
3. This Policy will continue to apply to any Insider whose relationship with the Company terminates, as long as the individual possesses Material Non-Public Information that he or she obtained in the course of his or her relationship with the Company.
The materiality of a fact depends on the circumstances. A fact is considered “material” if (1) there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security or (2) where the fact is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to any type of security, debt or equity. While it is not possible to identify all information that would be deemed to be material, some examples include: earnings, dividend actions, mergers and acquisitions, major dispositions, securities offerings, other significant transactions, major discoveries, major new products, significant advances in research, major personnel changes, labor negotiations, major contract negotiations, unusual gains or losses in major operations, major litigation and major marketing changes. Although you may have information about the Company or third parties that you do not consider to be material, federal regulators and others may conclude that such information was material. When doubt exists, you should presume the information is Material and contact the Legal Department for further discussion.
Information is “non-public” if it is not available to the general public. Information generally becomes available to the public when it has been disclosed by the Company or, in the case of information concerning third parties, by the third party. Information may be disclosed in a press release or other broadly disseminated public statement, including any filing with the Securities and Exchange Commission (“SEC”), which constitutes effective dissemination to the public. The circulation of rumors, even if accurate and reported in the media, does not constitute effective dissemination. Further, the inclusion of information in documents that are publicly available but not broadly disseminated (such as filings with local governmental agencies) does not constitute effective dissemination. In addition, even after a public dissemination of material information, a reasonable period of time must elapse in order for the market to react to the information. When doubt exists, you should presume the information is Non-Public and contact the Legal Department for further discussion.
Tipping means conveying Material Non-Public Information to any other person by providing them with Material Non-Public Information or assisting them in any way with respect to such Material Non-Public Information (“tipping”). The person conveying the information is called the “tipper” and the person to whom the information is conveyed is called the “tippee.”
A Waiting Period is a period of time that must elapse after Material Information is made public before the information is deemed to be public.
This is a subset of persons to whom this Policy applies. The Company has designated its Directors, and certain of its officers and key employees as “Key Persons.” Included in the definition of Key Persons are Related Persons. These Key Persons are subject to Additional Restrictions regarding the buying and selling of the Company’s securities. The list of Key Persons may be amended from time to time. The Company will notify each Key Person upon their designation as a Key Person.
1. Open Trading Window. This is a term applicable to Key Persons. It defines the time period within which a Key Person may trade in the Company’s securities, provided all other conditions have also been satisfied.
2. Pre-Trading Clearance. This is a term applicable to Key Persons. It describes the procedure that a Key Person must follow before trading in the Company’s securities.
If a Director, officer or any employee of the Company or any agent, advisor, consultant or contractor to the Company has Material Non-Public Information relating to the Company, neither that person nor any Related Person may trade in the Company’s securities, or engage in any other action to take advantage of, or pass on to others, that information. This general prohibition also applies to the Material Non-Public Information relating to any other company with publicly-traded securities, including our customers or suppliers, obtained in the course of employment or association with the Company.
Maintaining Confidentiality of Material Non-Public Information.
1. You must maintain Material Non-Public Information in strict confidence, and should not communicate such information to any person unless the person is employed by or represents the Company and has a “need to know” the information for legitimate, Company-related business purposes.
2. You must be discreet with Material Non-Public Information and not discuss it in public places where it can be overheard.
3. No Tipping. If you come into the possession of Material Non-Public Information, you must safeguard the information and not intentionally or inadvertently communicate it to any person (including family members and friends) unless the person has a “need to know” the information for legitimate, Company-related business purposes. An individual who improperly reveals Material Non-Public Information to another person under circumstances unrelated to Company business can be held liable for the trading activities of his or her “tippee” and any other person with whom the “tippee” shares the information, and may also be subject to disciplinary actions by the Company.
4. Other companies’ Material Non-Public Information. This confidentiality requirement also applies to Material Non-Public Information relating to any other company with publicly-traded securities, including our customers or suppliers, obtained in the course of employment by or association with the Company.
Prohibition on Illegal Insider Trading.
You may not trade in securities of a company while in possession or aware of Material Non-Public Information concerning such company.
1.Applicability to other company’s securities. This prohibition applies to the securities of other public companies where you have come into possession of Material Non-Public Information about that other company during the course of your employment or your association with the Company.
The insider trading rules apply both to purchases (to make a profit based on good news) and sales (to avoid a loss based on bad news), regardless of how or from whom the Material Non-Public Information has been obtained.
Waiting Period: Before you trade, you should allow one full trading day following publication as a reasonable waiting period before such information is deemed to be public. A “trading day” is a day that the market is open for trading. For example:
1. If the announcement is made before trading begins on Monday, you may start trading on Tuesday of that week because one full trading day (Monday) has passed.
2. If the announcement is made after trading begins on Monday, you may start trading on Wednesday of that week.
3. If the announcement is made after trading begins on Friday, you may start trading on Tuesday of the following week.
Avoid Speculation and Market Timing: Investing in Company securities provides an opportunity to share in the future growth of the Company. Investing in the Company and sharing in the growth of the Company, however, does not mean engaging in speculative short-term trading. Such activities may put the personal gain in conflict with the best interests of the Company and its security holders.
1. You may not “short” Company securities (i.e., selling stock you do not own and borrowing the shares to make delivery) or trade in options, warrants, puts or calls or similar instruments of the Company’s securities.
2. You should not engage in a series of buying and selling Company securities over a short period of time in an attempt to time the market.
Exercise of Stock Options: You may exercise options (acquired under Company-sponsored plans), solely with cash, or other equity awards at any time. However, while in possession of Material Non-Public Information concerning the Company, you may not exercise such options or other equity awards by means of a cashless exercise through a broker or pay any tax liability that results from such exercise by delivering shares to the Company or having the Company withhold shares.
Additional Requirements and Restrictions Applicable to Key Persons.
1. In addition to the general requirements and restrictions outlined in this Policy, to avoid improper conduct or the appearance of impropriety, Key Persons are also subject to Additional Requirements and Restrictions.
2. Key Persons must satisfy four conditions before they may trade in securities of the Company. A Key Person may trade in the Company’s securities only (a) so long as that Key Person is not in possession of any Material Non-Public Information regarding the Company; (b) during the Open Trading Window, which is the period beginning the second trading day after the public release of quarterly and annual earnings, and ending on the fifteenth calendar day of the third fiscal month of the fiscal quarter; (c) in the absence of a general trading ban; and (d) after the Key Person has obtained prior approval via the Pre-Trading Clearance and Certification Form from the Company’s Chief Legal Officer or his/her designee (see Exhibit C-1006.4.4.2).
The Open Trading Window: The following chart outlines the dates of the Open Trading Window
|Fiscal Quarter Ending
||Trading Window Opens
||Trading Window Closes
|Q1 – March 31
||Second trading day after Q1 earnings announcement
|Q2 – June 30
||Second trading day after Q2 earnings announcement
|Q3 – September 30
||Second trading day after Q3 earnings announcement
| Q4 and Fiscal Year – December 31
||Second trading day after Q4 and year-end earnings announcement
|| March 15
The Open Trading Window is not a safe harbor. A Key Person who is aware of Material Non-Public Information must not buy or sell even during an Open Trading Window.
Pre-Trading Clearance: Each proposed transaction submitted for Pre-Trading Clearance will be evaluated to determine if it raises any concerns under the securities laws and regulations. Any advice will relate solely to the restraints imposed by law and will not constitute advice regarding the investment aspects of any transaction. Clearance of a transaction is valid for a period of only two trading days. If the transaction order is not placed within that two trading day period, clearance of the transaction must be re-requested. If clearance is denied, the fact of such denial must be kept confidential by the person requesting such clearance.
Additional Trading Bans: Be aware that the Company may close trading during an Open Trading Window in light of developments that may involve Material Non-Public Information. In these situations, the Company will notify particular individuals that they should not engage in trading of Company securities (except as permitted under a Rule 10b5-1 plan as described below) and should not disclose to others the fact that the Open Trading Window has been closed. If the relationship of an individual with the Company should terminate while such a notice is in effect, the prohibition will continue to apply until the Company gives notice that the ban has been lifted.
Margin Accounts and Pledges: Key Persons shall not hold Company securities in a margin account or pledge Company securities as collateral for a loan. Securities held in a margin account or pledged as collateral for a loan may be sold without your consent by the broker if you fail to meet a margin call or by the lender in foreclosure if you default on the loan. A margin or foreclosure sale that occurs when you are aware of Material Non-Public Information may, under some circumstances, result in unlawful insider trading.
Additional Restrictions Relating to Sale of Stock Acquired by Option Exercise: Key Persons in possession of Material Non-Public Information are prohibited from selling Company securities acquired by exercising stock options until 90 days after such Key Person leaves the Company or the Board. Notwithstanding the previous sentence, Key Persons may, subject to the restrictions discussed in this Policy and other applicable Company policies, immediately sell Company securities acquired by exercising stock options for the limited purposes of paying the exercise price of the stock option and any applicable tax liability.
Pre-arranged Trading Plans: The law provides an affirmative defense from insider trading liability if trades occur pursuant to a pre-arranged “Trading Plan.” This refers to a binding contract, an instruction or a written plan (often referred to as a “10b5-1 plan”) that meets specified conditions.
1. The Trading Plan must be established at a time when you do not possess Material Non-Public Information.
2. The Trading Plan must be entered into during an Open Trading Window.
3. The Trading Plan must specify the amount, price and date on which securities are to be purchased or sold. This may be accomplished through a formula or may specify trading parameters which another person has discretion to administer.
4. You must not exercise any subsequent discretion affecting the transactions, and if your broker or any other person exercises discretion implementing the trades, you must not influence his or her actions and he or she must not possess Material Non-Public Information at the time of the trades.
5. The Trading Plan can be established for a single trade or a series of trades.
6. All Trading Plans must be reviewed and approved by the Company’s Chief Legal Officer or his/her designee before they are implemented. The Trading Plan must include a 30-day waiting period before the first trade can be made.
7. You should properly document the details of your Trading Plan. There are other procedural conditions that must be met before you can rely on a Trading Plan as an affirmative defense to a charge of illegal insider trading. These include that you act in good faith, that you not modify your trading instructions while in possession of Material Non-Public Information, and that you not enter into or alter a corresponding or hedging transaction or position. If all conditions are satisfied, you may claim a defense to insider trading liability if the transactions under the Trading Plan occur at a time when you have subsequently learned Material Non-Public Information.
8. Because this rule is complex, the Company recommends that you work with a broker and the Company’s Chief Legal Officer or his/her designee and be sure that you fully understand the limitations and conditions of the rule before you establish a Trading Plan.
Section 16 Compliance: This subsection applies only to persons subject to Section 16 of the Securities Exchange Act of 1934. For purposes of this Section the term “Section 16 Insider” means (a) all Directors of the Company; and (b) the Company’s (1) President, (2) Principal Financial Officer, (3) Principal Accounting Officer, (4) Vice-President in charge of a principal business unit, division or function, (5) any other officer (or person) who performs a policy-making function, and (6) any officer of the Company designated as an “Executive Officer” in the Company’s Annual Report on Form 10-K, each as designated by the Board. Section 16 Insiders are subject to Section 16 compliance and reporting requirements. The Company shall notify any officer who, by reason of his or her position with the Company, is or becomes a Section 16 Insider. All Section 16 Insiders shall comply with all requirements of Section 16 of the 1934 Act, Rule 144 of the Securities Act of 1933 Act and the Company’s procedures for Directors and Section 16 Officers.
1. Any employee who has knowledge of conduct that he or she believes may violate this Policy has an obligation to bring the matter to the attention of the Company’s Chief Legal Officer promptly either directly or through use of the Company’s anonymous Ethics Helpline or Website.
2. Any form of adverse action or retaliation against any Company employee for reporting in good faith a suspected violation of this Policy or for participating in an investigation of a suspected violation will not be tolerated and is expressly prohibited. Any employee who participates in retaliatory conduct in violation of this Policy will be subject to disciplinary action as deemed necessary, up to and including termination.
Penalties for Insider Trading
1. Persons who violate the insider trading prohibitions are potentially subject to civil damages and criminal penalties. The civil damages can consist of disgorgement of any illicit profits and a fine of up to three times the profit gained or loss avoided. The criminal penalties can be as much as $5 million and 20 years imprisonment per violation.
2. Liability of Controlling Persons. Employers and other controlling persons (including supervisory personal) may also be at risk for the conduct of those they supervise. The SEC can bring a civil action against any “controlling person” who knows of, or recklessly disregards, a likely insider trading violation by a person under his or her control and fails to take appropriate steps to prevent the violation from occurring. Penalties can include a civil fine equal to the greater of $1 million or three time the profit gained or loss avoided. The Company, its Directors and officers, and some managerial personnel could be deemed controlling persons subject to his potential liability. Such persons should maintain an awareness of possible insider trading violations by persons under their control and take measures where appropriate to prevent such violations.
3. Any employee who violates this Policy, or who directs or knowingly permits a subordinate to violate this Policy, shall be subject to disciplinary action, including possible termination.
All employees and Key Persons, as required by the Company, must certify in writing that they have read and intend to comply with the procedures set forth in this Policy. (Exhibit C-1006.5.1.1). Additionally, your broker-dealer will need to sign a broker instruction and representation letter in the event you establish a Rule 10b5-1 Trading Plan. (Exhibit C-1006.5.1.2).
The Board reserves the right to amend this Policy at any time. The Chief Executive Officer and Chief Legal Officer of the Company, a committee of the Board, and, in some circumstances, their designees, may grant a waiver of this Policy on a case-by-case basis, but only under special circumstances.
Revised July 2014
The Board of Directors (the “Board”) of Cliffs Natural Resources Inc. (“Cliffs”) has adopted the following Corporate Governance Guidelines (“Guidelines”) as a framework within which the Board may conduct its business. These Guidelines should be interpreted in the context of all applicable laws and Cliffs’ other corporate governance documents.
Board Duties and Responsibilities
General: The primary purpose of the Board is to promote the long-term interests of Cliffs’ shareholders through oversight of the management of Cliffs’ business and affairs. To accomplish this purpose, the Board is committed to establishing a corporate culture of accountability, responsibility and ethical behavior by carrying out its responsibilities with honesty and integrity and through the careful selection and evaluation of senior management and Board members.
Principal Duties: The principal duties of the Board are to: (a) select and evaluate the Board Chair and the Chief Executive Officer and/or President; (b) evaluate, approve and monitor the Chief Executive Officer’s and/or President’s strategic plan and annual management objectives; (c) review and appraise Cliffs’ operating performance; (d) maintain a comprehensive governance process and high standards of internal control, business ethics, and legal and regulatory compliance; (e) oversee Cliffs’ overall enterprise risk management program; and (f) maintain an effective management development and succession plan.
Director Responsibilities: Directors are expected to prepare for, attend, and participate in all meetings of the Board, its Committees on which they serve and the Annual Meeting of Shareholders; review materials distributed in advance of meetings; and make themselves available for periodic updates and briefings with management via telephone or one-on-one meetings. Directors are expected to devote the time and attention necessary to discharge their responsibilities appropriately.
Succession Planning: With the assistance of the Compensation and Organization Committee, the Board will develop and maintain a succession plan for the positions of Board Chair, Chief Executive Officer and/or President, including appropriate contingencies in the event that the Board Chair, Chief Executive Officer and/or President retires or is incapacitated. The Board Chair, Chief Executive Officer and/or President should make available their recommendations and evaluations of potential successors, along with any recommended development plans for such individuals.
Commitment Authority Levels: The Board periodically will review and approve procedures for the authorization of capital expenditures and other commitments of Cliffs, its subsidiaries and its associated companies.
Annual Evaluation: The Board and each Committee must perform an annual self-evaluation of its performance to determine whether the Board and Committees are functioning effectively. The Lead Director will also perform at least annually evaluations of the independent Directors. The Governance and Nominating Committee is responsible for overseeing the Board, Committee and independent director evaluation process.
Meetings: The Board must meet at least quarterly and typically convenes five regular meetings per year. The Board may hold special meetings as necessary. At least one such meeting annually will take place at a Cliffs mining operation. Cliffs’ general counsel or the equivalent officer shall meet with the Board at least quarterly and shall present a written report on material pending or threatened litigation and material compliance issues known to her or him or the Company’s legal department. Such general counsel or the equivalent officer will also be required to approve all quarterly press releases before issuance by Cliffs.
Agendas and Board Materials: Board meeting agendas are prepared by members of Cliffs’ management and approved by the Chief Executive Officer and/or President and the Lead Director and by the Board Chair when the Chief Executive Officer and/or President is not the Board Chair. Each Board member may submit items to be included on the agenda. Board members may also raise subjects that are not on the agenda at any meeting. All proposed resolutions for action at the meeting must be provided, if feasible, to each Director in advance of the meeting in order to allow sufficient time for advance review and discussion at the meeting.
Other Meeting Procedures: The Board Chair will chair Board meetings, except those meetings involving only independent Directors. If the Board Chair is not present, the Lead Director will chair Board meetings. The Board or the Chief Executive Officer and/or President may invite members of management to attend Board meetings (other than the meetings of independent Directors only) as appropriate under the circumstances and in light of the topics addressed at such meetings.
Access to Management and Advisors: Directors have access to Cliffs’ management either (i) directly or (ii) by making arrangements through the Chief Executive Officer, President or the Secretary. Directors should ensure that any such contact is not disruptive to the business operations of Cliffs. As necessary and appropriate, the Board and its Committees may retain outside legal, financial and other advisors.
Executive Sessions of Independent Directors: At each Board meeting, time will be set aside for the independent Directors to meet in executive session without Cliffs' management. Additional executive sessions may be held as needed. The Lead Director or a majority of the independent Directors may call a meeting of the independent Directors at any time. The Lead Director will set the agenda, supervise the conduct of the meetings of independent Directors, and communicate the results of the meetings to the Chief Executive Officer and/or President, as appropriate.
Board Composition and Membership Criteria
Board Size: The Board will review and determine the number of Directors (in accordance with Cliffs’ then current articles of incorporation and regulations) based on recommendations of the Governance and Nominating Committee.
Director Independence: A substantial majority of the members of the Board must be “independent” under the rules of the New York Stock Exchange, Inc. (“NYSE”) and under applicable law.
Board Leadership: The Board will designate the Board Chair upon recommendation by the Governance and Nominating Committee. When the Chief Executive Officer, President or another Cliffs’ executive is designated Board Chair, the Governance and Nominating Committee will recommend to the Board a Director who will serve as the “Lead Director.” Such Lead Director must be “independent” under the rules of NYSE and under applicable law. If an interim executive or non-executive Board Chair is designated, he or she also will serve as the Lead Director for purposes of these Guidelines. When an interim executive Board Chair is designated, the chair of the Governance and Nominating Committee will (a) preside at all meetings of the Board at which the Chair is not present, including executive sessions of the Independent Directors; (b) serve as liaison between the Chair and the Independent Directors; and (c) will evaluate the performance of the Independent Directors with the interim executive Chair.
Lead Director Responsibilities: Except as set forth in the preceding sentence, the duties and responsibilities of the Lead Director include the following: (a) preside at all meetings of the Board at which the Chair is not present, including executive sessions of the Independent Directors; (b) serve as liaison between the Chair and the Independent Directors; (c) ensure that he or she is available for consultation and direct communication, if requested by major shareholders; (d) meet separately with each Director at least annually; (e) evaluate the performance of the Independent Directors; (f) has the authority to call meetings of the Independent Directors; (g) at least annually discuss with the Chief Executive Officer and/or President the results of the reviews by the Compensation and Organization Committee and Board of the Chief Executive Officer’s and/or President’s performance and compensation level; and (h) such other duties as the Independent Directors may designate from time to time. In addition, to the extent practical, the Lead Director (i) approves information sent to the Board, (ii) approves meeting agendas for the Board, and (iii) approves meeting schedules to assure that there is sufficient time for discussion of all agenda items.
Board Membership Criteria: The Governance and Nominating Committee is responsible for reviewing with the Board, at least annually, the qualifications required of Board members, including specific experience, qualifications, attributes, judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any Committees of the Board.
Selection of Director Nominees: The Governance and Nominating Committee is responsible for interviewing and recommending candidates for election to the Board in accordance with the policies and principles in its charter and the criteria described herein. The Governance and Nominating Committee is also responsible for reviewing the nomination of incumbent Directors for re-election to the Board as part of its annual review and selection process.
Service on Other Boards: A Director may not serve on more than three other public company boards of directors. Directors must advise the Chief Executive Officer and/or President and the Chair of the Governance and Nominating Committee in advance of accepting an invitation to serve on the board of directors of another public company. The Chief Executive Officer and/or President and other elected officers must seek the approval of the Governance and Nominating Committee before accepting membership on any public company board.
Changes in Circumstances: Any director who experiences a change in primary occupation, position or primary business affiliation, including retirement, or a change in personal circumstances that is reasonably likely to impair his or her service as a Board member, is expected to submit a letter of resignation promptly to the Board Chair and the Chair of the Governance and Nominating Committee, conditional upon acceptance by the Board.
Term Limits: No Independent Director may stand for election more than twelve years in the aggregate. After twelve years of service, Independent Directors may continue as non-voting, honorary Board members. The Board may determine exceptions to these term limits on an individual basis if a member exhibits high-level performance and effective service, provided that the Board shall disclose such decision to extend an Independent Director’s term limit in the Company’s annual Proxy Statement for such year.
Retirement Policy: No director may stand for re-election after reaching age 72, although the Board may determine exceptions on an individual basis.
Resignations: A Director is expected to tender his or her resignation to the Board Chair if the Director is no longer eligible for membership under these Guidelines, has retired, resigned or been terminated as an employee of Cliffs, or cannot perform the duties of a Director. The Governance and Nominating Committee will review each such tendered resignation and recommend appropriate action to the Board. The Board has discretion whether to accept or reject any such tendered resignation.
Resignation on Failure to Obtain Majority Vote: The Board will nominate for election or re-election as a Director only those candidates who have submitted or agreed to submit a standing conditional resignation, in the form set forth on Annex B, that will be considered by the Board in the event such candidate fails to receive the vote of a majority of the votes cast by shareholders at a meeting in an uncontested election of Directors. This resignation policy does not apply when cumulative voting has been invoked.
Director Orientation and Continuing Education
New Director Orientation: New Directors are expected to attend a Cliffs' orientation program that includes presentations by senior management. Incumbent Directors will also be invited to participate in the orientation program.
Continuing Education: Cliffs will provide one in-house Director training program each year using a third-party facilitator. The Board also encourages Directors to participate in continuing education programs sponsored by organizations specializing in director education. Cliffs will reimburse each Director for the reasonable expenses of attending such continuing director education programs (if the Director serves on other public company boards, on a pro rata basis).
Director Compensation and Stock Ownership
Compensation Policy: Independent Directors’ compensation consists of a mix of an annual cash retainer paid quarterly and annual equity compensation, based on continued service on the Board and Cliffs’ performance and other appropriate factors determined by the Board. The Governance and Nominating Committee annually will review the status of, and make recommendations to the Board regarding, compensation paid to independent Directors in relation to other comparable companies and other factors.
Stock Ownership Guidelines: The Governance and Nominating Committee periodically shall review Cliffs’ minimum stock ownership guidelines for Directors and report any recommended changes to the Board.
Standing Committees: The standing committees of the Board include an Audit Committee, Compensation and Organization Committee, and Governance and Nominating Committee (the “Core Committees”). In addition, the Board has designated a Strategy and Sustainability Committee and may designate such other committees as it deems necessary from time to time.
Committee Authority: Each Committee will act only (i) by the affirmative vote of a majority of the members at a meeting at which a quorum is present or (ii) by unanimous written consent of all members of such Committee.
Appointment and Term of Service of Committee Members: Each Committee must consist of no fewer than three members, one of whom will serve as Chair of such Committee. The actual number of members of each Committee will be determined from time to time by the Board. The Board may appoint or remove any Committee member after considering the recommendations of the Governance and Nominating Committee. With the concurrence of the Committee Chair, the Board may appoint alternate members of each Committee to take the place of any absent member at any Committee meeting. Such participant will receive the same compensation for attendance at such meeting as a member of the Committee.
Each member of the Core Committees must be “independent” under the criteria established by NYSE rules and applicable law.
Committee Chairs: The Board directly appoints the Audit Committee Chair; all other Committee Chairs are approved by the Board based upon the recommendation of the Governance and Nominating Committee. Each Committee Chair has such responsibilities as the respective Committee may designate from time to time. No Board member may serve as Committee Chair to more than one Committee.
Committee Meetings: Each Committee will meet as frequently as necessary to carry out its responsibilities under its respective charter. Meetings will be scheduled to allow sufficient time for deliberation on complex or substantial matters before required decisions or presentations to the Board. A majority of the number of members of such Committee constitutes a quorum for purposes of Committee meetings.
Each Committee Chair will, in consultation with the other members of such Committee and appropriate officers of Cliffs, establish the agenda for each Committee meeting. Any Committee member may submit items to be included on the agenda. Committee members also may raise subjects that are not on the agenda at any meeting. In the event of an unexpected absence of the Committee Chair, the Committee members will appoint a member to act as Chair.
Related Party Transactions Policy
Transactions with Directors: Except for employment arrangements with the Chief Executive Officer, President and/or other executives serving on the Board, if any, Cliffs does not engage in transactions with Directors or their affiliates if a transaction would cast into doubt the independence of a Director, present the appearance of a conflict of interest, or otherwise be prohibited by law, rule or regulation. Any waiver of this policy may be made only by the Board upon recommendation of the Governance and Nominating Committee or Audit Committee and must be promptly disclosed to Cliffs’ shareholders.
Board Interaction with Investors, Media, Constituencies and Others
General Representation: The Board Chair, Chief Executive Officer and/or President and/or the Lead Director are to represent the Board and Cliffs in relations with external constituencies and Cliffs’ employees. Directors must refer direct inquiries from external constituencies or employees to the Board Chair and/or the Lead Director, as appropriate. The Board Chair and the Lead Director will report to the Board any requests from external constituencies or employees to meet with the Board or any group of Directors.
Confidentiality: The proceedings and deliberations of the Board and Committees are confidential. Each Director will maintain the confidentiality of information received in connection with his or her service as a Director.
July 27, 2016