SENIOR ADVISOR AGREEMENT
Exhibit
10.1
THIS
SENIOR ADVISOR AGREEMENT (this “Agreement”) is made and entered into the
9th
day of
November, 2005, as of the first day of June, 2005, by and among HAWK
CORPORATION, a Delaware corporation (“Hawk” or the “Company”) and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”).
RECITALS
A. The
parties are parties to the Amended and Restated Employment Agreement dated
as of
December 31, 2001 (the “Employment Agreement”) and the First Amendment to
Amended and Restated Employment Agreement dated as of December 31, 2003
(together with the Employment Agreement, the “Restated Employment Agreement”;
B. The
parties are parties to a Consulting Agreement dated as of December 31,
2001
(the “Consulting Agreement”);
C. The
parties desire to terminate the Restated Employment Agreement and the Consulting
Agreement and amend the terms and conditions under which ▇▇▇▇▇▇▇ will be
retained by the Company in accordance with the terms set forth in this
Agreement;
NOW
THEREFORE, in consideration of the premises and the promises and agreements
contained herein and other good and valuable consideration, the sufficiency
and
receipt of which
are
hereby acknowledged, and intending to be legally bound, the Company and ▇▇▇▇▇▇▇
agree as follows:
1. EMPLOYMENT.
The
Company hereby employs ▇▇▇▇▇▇▇ as a senior advisor and ▇▇▇▇▇▇▇ agrees to be
employed by the Company as a senior advisor for a period commencing as of the
date hereof and terminating on June 30, 2012. Such period, together
with
the period of any extension or renewal upon the mutual agreement of the Company
and ▇▇▇▇▇▇▇, of such employment is herein referred to as the “Advisory
Period.”
2. COMPENSATION
AND BENEFITS.
Provided
that ▇▇▇▇▇▇▇’▇ employment hereunder is not terminated in accordance with this
Agreement, during the Advisory Period ▇▇▇▇▇▇▇ shall receive as
compensation:
(a) Salary:
Salary
at the annual rate of $418,625, payable not less frequently than semi-monthly
(as adjusted from time to time, “Base Wages”), reduced by any payments made to
▇▇▇▇▇▇▇ under (i) any non-contributory defined benefit plan maintained
by
the Company (“Defined Benefit Payments”) and (ii) any disability or similar
policy.
(b) ▇▇▇▇▇▇▇
Benefit Programs:
▇▇▇▇▇▇▇
shall have the right to participate, subject to any applicable eligibility
requirements, in all corporate employee benefit programs offered to “executive”
employees by the Company and any other plans made available by the Company
in
the future to its executives and “key” management employees, including, if any,
the Company’s 401(k) plan, health and life insurance programs and
non-contributory defined benefit plans.
(c) Executive
Bonus Plan:
During
each year of the Advisory Period, ▇▇▇▇▇▇▇ shall receive a bonus pursuant to
the
Annual Incentive Compensation Plan presently in effect in an amount $100,000
less than the bonus payable to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇▇”) but not to
exceed $250,000.
(d) Business
Expenses:
The
Company shall promptly reimburse ▇▇▇▇▇▇▇ for all reasonable and necessary
business expenses incurred by ▇▇▇▇▇▇▇ on behalf of the Company and its parent,
wholly-owned subsidiaries or affiliated entities during the Advisory Period.
▇▇▇▇▇▇▇ shall submit to the Company appropriate expense reports that detail
such
expenses and includes copies of receipts where appropriate.
(e) Office:
▇▇▇▇▇▇▇
shall retain the office he is presently housed in or its equivalent.
(f) Automobile
Expenses:
▇▇▇▇▇▇▇
shall be entitled to receive a car allowance in the amount determined by the
Compensation Committee (regardless of its membership), but not less than the
amount presently paid, payable semi-monthly. The Company shall provide property
and liability insurance on ▇▇▇▇▇▇▇’▇ automobile and reimburse ▇▇▇▇▇▇▇ for the
reasonable maintenance and repair costs incurred with respect to ▇▇▇▇▇▇▇’▇
automobile.
(g) Insurance:
For the
Advisory Period and any renewal thereof, the Company shall continue to maintain
and pay the premiums on the insurance policies issued by Massachusetts Mutual
Life (Policy Numbers 71396950 and 6160812), or such other similar policies
as may be agreed by ▇▇▇▇▇▇▇. Such insurance policies shall continue to be
subject to the applicable split-dollar agreements between the Company and
▇▇▇▇▇▇▇.
3. ADJUSTMENTS
TO COMPENSATION. ▇▇▇▇▇▇▇
hereby authorizes the Company to withhold and withdraw from amounts payable
to
▇▇▇▇▇▇▇ under this Agreement all applicable amounts required by federal, state
and local laws.
4. DUTIES.
▇▇▇▇▇▇▇
shall, during the Advisory Period, serve as the Chairman Emeritus of the Board
and senior advisor of the Company or in any capacity as the Board of Directors
(the “Board”) may request and ▇▇▇▇▇▇▇ shall mutually agree to serve from time to
time and in such
39
capacity.
▇▇▇▇▇▇▇'▇ title shall be Chairman Emeritus of the Board and Founder. During
the
Advisory Period, ▇▇▇▇▇▇▇ shall perform such duties and responsibilities as
are
customarily assigned to the Chairman Emeritus and Founder and senior advisor
of
the Company and shall chair the Company's annual stockholder meeting. ▇▇▇▇▇▇▇
shall be required to devote the time and efforts to the business and affairs
of
the Company as is necessary to discharge his duties and ▇▇▇▇▇▇▇ may
(i) serve on the boards of directors of other companies and on the
boards
of trustees of charitable organizations, and (ii) devote a portion
of his
time and efforts to the making and management of personal investments, in
each
case for so long as ▇▇▇▇▇▇▇ continues to substantially perform his duties
and
functions hereunder to the best of his ability and skill in such a manner
as to
promote the best interests of the Company. ▇▇▇▇▇▇▇ further agrees to serve
as a
director on the boards of directors of the Company’s subsidiaries or affiliated
entities and in one or more executive offices of any of the Company’s
subsidiaries or affiliated entities.
5. LIMITATIONS
ON AUTHORITY.
(a) Notwithstanding
anything else herein contained, ▇▇▇▇▇▇▇ shall adhere to the written limitations
on authority as issued from time to time by the Board. Nothing contained herein
shall be deemed to restrict the power of the Board to limit the authority of
▇▇▇▇▇▇▇. Any violation of the terms of this Section 5(a) shall be deemed
to
be a material violation of a provision of this Agreement.
(b) Notwithstanding
anything else herein contained, the Company shall cause ▇▇▇▇▇▇▇▇, as long as
he
remains Chief Executive Officer of Hawk and any successor to ▇▇▇▇▇▇▇▇ as Chief
Executive Officer of Hawk, to consult in advance with ▇▇▇▇▇▇▇ on each of the
matters set forth below; provided that each of the Company and ▇▇▇▇▇▇▇
understand and agree that ▇▇▇▇▇▇▇’▇ advice shall be sought but that his consent
and/or approval with respect to any of the following matters shall not be
required:
(i) The
(A) evaluation of key management employees of the Company together with
salary reviews, and (B) increases in compensation of key management
employees of Hawk;
(ii) The
entering into and/or execution of contracts, agreements, joint ventures and
other commitments which would have a material effect on the business, financial
condition and affairs, properties, assets, obligations, and operation of
Hawk;
(iii) The
formulation of the annual budget and business plan of Hawk;
(iv) The
formulation of the business goals of Hawk;
(v) The
merger, consolidation, combination, liquidation, or sale of all or substantially
all the assets or stock of Hawk or any of its affiliates that are material
to
Hawk as a whole and the acquisition or purchase of all or substantially all
the
assets or stock of another company or entity that is material to Hawk as a
whole; and
(vi) Any
other
matter which would have a material effect on the business, operations, financial
condition or affairs, assets or properties of Hawk.
(c) ▇▇▇▇▇▇▇
is not vested with any authority to set policy on behalf of the
Company.
Failure
to comply with this Section 5 shall not be deemed a material breach
of this
Agreement.
6. DEATH
OF EMPLOYEE.
In the
event ▇▇▇▇▇▇▇ should die during the Advisory Period and:
(a) at
the
time of ▇▇▇▇▇▇▇’▇ death, ▇▇▇▇▇▇▇ has a wife, then: (i) payments shall be
made pursuant to and in accordance with the Amended and Restated Wage
Continuation Agreement between the Company and ▇▇▇▇▇▇▇ dated as of
December 31, 2001, and the First Amendment to Restated Wage Continuation
Agreement of even date (collectively, the “Wage Continuation Agreement”), which
is herein incorporated by reference; (ii) the Company shall pay to
▇▇▇▇▇▇▇’▇ wife the amount of bonus which ▇▇▇▇▇▇▇ would have received under
Section 2(c) hereof for the year of ▇▇▇▇▇▇▇’▇ death which shall be prorated
for the portion of the year ending upon the date of death; and (iii) the
Company shall continue to provide and/or pay for the existing health care
coverage to ▇▇▇▇▇▇▇’▇ wife to the maximum extent allowable in all respects under
applicable law; provided,
however,
that
▇▇▇▇▇▇▇’▇ surviving spouse’s primary provider of medical coverage shall be
Medicare and the Company’s health care coverage shall be the secondary payor;
and provided
further,
however,
that
the combined benefits of Medicare and the Medicare supplemental policy shall
be
substantially the same as then available under the Company’s existing health
care coverage for active employees; or
(b) at
the
time of ▇▇▇▇▇▇▇’▇ death, ▇▇▇▇▇▇▇ has no wife, then the Company shall:
(i) for a period of two (2) years, continue to pay ▇▇▇▇▇▇▇’▇ Base
Wages at the same monthly rate earned by ▇▇▇▇▇▇▇ immediately prior to his death
to ▇▇▇▇▇▇▇’▇ beneficiaries or estate; and (ii) pay to ▇▇▇▇▇▇▇’▇
beneficiaries or his estate, the amount of bonus which the ▇▇▇▇▇▇▇ would have
received under Section 2(c) hereof for the year of ▇▇▇▇▇▇▇’▇ death which
shall be prorated for the portion of the year ending upon the date of
death.
7. DISABILITY
OF EMPLOYEE.
[INTENTIONALLY
OMITTED.]
8. TERMINATION.
(a) The
Company may terminate ▇▇▇▇▇▇▇’▇ employment hereunder at any time for cause,
which shall be deemed to include the following: (i) ▇▇▇▇▇▇▇’▇ engaging in
fraud, misappropriation of funds, embezzlement or like conduct committed
against
the Company; or (ii) ▇▇▇▇▇▇▇’▇ conviction of a felony.
40
(b) ▇▇▇▇▇▇▇’▇
employment hereunder may be terminated by the Company in the event of ▇▇▇▇▇▇▇’▇
voluntarily leaving the employ of the Company.
(d) In
the
event that ▇▇▇▇▇▇▇’▇ employment with the Company is terminated by the Company or
by ▇▇▇▇▇▇▇, the parties agree that the provisions of Sections 8(c),
9, 10,
11, 12, 13, 14, 17, 18, 21, 24 and 25 hereof shall survive such termination
and
continue in full force and effect.
9. NON-COMPETITION.
▇▇▇▇▇▇▇
recognizes and acknowledges that the business of the Company is the manufacture,
marketing and development of friction materials, metal stampings, powder metals,
metal injection moldings, rotors, electric motors, performance racing products
and businesses related thereto. ▇▇▇▇▇▇▇ agrees that within the United States,
Canada, Italy, Mexico and China and any other location in which the Company
engaged in all or part of the above-described business at any time during the
Advisory Period, and for two (2) years from and after the date of the
termination of ▇▇▇▇▇▇▇’▇ employment hereunder (the “Restricted Period”), ▇▇▇▇▇▇▇
shall not, in any manner, directly or indirectly on behalf of himself or any
other person, firm, business or corporation;
(a) Establish,
operate or engage in, financially or otherwise, as an owner, partner,
shareholder, officer, director, licensor, licensee, principal, agent, employee,
trustee, consultant or in any other relationship or capacity, the business
of
the Company;
(b) Request
or instigate any account or customer of the Company or its subsidiaries or
affiliates to withdraw, diminish, curtail or cancel any of its business with
the
Company or its subsidiaries or affiliates; or
(c) Hire,
solicit, or encourage to either leave the employment of or cease working with
the Company or its subsidiaries or affiliates (i) any current employee
of
the Company or its subsidiaries or affiliates, or (ii) any employee
who has
left the employment of or ceased working with the Company or its subsidiaries
or
affiliates within one (1) year of the date of termination of such
employee’s employment with the Company.
In
the
event of ▇▇▇▇▇▇▇’▇ breach of any provision of this Section, the running of the
Restricted Period shall be automatically tolled (i.e.,
no part
of the Restricted Period shall expire) from and after the date of the first
such
breach.
10. CONFIDENTIAL
INFORMATION.
▇▇▇▇▇▇▇
recognizes and acknowledges that confidential information, including, without
limitation, information, knowledge or data: (i) of a business nature
such
as, but not limited to, information about cost, price, rates, profits,
purchasing, suppliers, advertising, customers, sales, marketing, promotion,
compensation, employment, personnel, including information regarding present
and
prospective customers and the business affairs and financial condition of the
Company; (ii) of a technical nature such as, but not limited to, methods,
know-how, processes and research; (iii) pertaining to future developments
such as, but not limited to, research and development projects and future
marketing, advertising or promotion; and (iv) pertaining to trade secrets
of the Company; and including all other matters which the Company treats as
confidential (the items described above being hereafter collectively referred
to
as “Confidential Information”), are valuable, special and unique assets of the
Company. During and after the Restricted Period, ▇▇▇▇▇▇▇ shall keep secret
and
retain in strictest confidence, shall not use for the benefit of himself or
others except in connection with the business and affairs of the Company, any
and all Confidential Information learned or obtained by ▇▇▇▇▇▇▇ before or after
the date of this Agreement, and shall not disclose such Confidential Information
to anyone outside of the Company either during or after employment by the
Company, except as required in the course of performing duties of his employment
with the Company, without the express written consent of the Company or as
required by law.
11. PROPERTY
OF EMPLOYER.
▇▇▇▇▇▇▇
agrees to deliver promptly to the Company all manuals, letters, notes,
notebooks, reports, computer programs and files, memoranda, customer and
supplier lists and all other materials relating in any way to the business
of
the Company and in any way obtained by ▇▇▇▇▇▇▇ during the period of his
employment with the Company which are in his possession or under his control,
and all copies thereof, (i) upon termination of ▇▇▇▇▇▇▇’▇ employment with
the Company, or (ii) at any other time at the Company’s request. ▇▇▇▇▇▇▇
further agrees that he will not make or retain any copies of any of the
foregoing and that he will so represent to the Company upon termination of
his
employment hereunder.
12. RIGHTS
AND REMEDIES UPON BREACH.
Both
parties recognize that the rights and obligations set forth in this Agreement
are special, unique and of extraordinary character. If ▇▇▇▇▇▇▇ breaches, or
threatens to commit a breach of, any of the provisions of Sections 9
through 11 hereof (hereinafter referred to as the “Restrictive Covenants”),
then the Company shall have the right and remedy to injunctive relief, which
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company pursuant to this
Agreement,
any applicable law or in equity. The right and remedy to have the Restrictive
Covenants specifically enforced by any court having equity jurisdiction,
it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
adequate remedy to the Company. As to the covenants contained in Section 9
hereof, specific performance shall be for a period of time equal to the
unexpired portion of the Restricted Period, giving full effect to the tolling
provision of Section 9 hereof, and beginning on the earlier of the
date on
which the court’s order becomes final and nonappealable or the date on which all
appeals have been exhausted.
41
13. DISCLOSURE.
The
Company may notify anyone employing ▇▇▇▇▇▇▇ or evidencing an intention to employ
▇▇▇▇▇▇▇ as to the existence and provisions of this Agreement and of the
Restrictive Covenants.
14. INDEMNIFICATION.
(a) The
Company shall indemnify ▇▇▇▇▇▇▇ (and his legal representative or other
successors) to the fullest extent provided by the articles or certificate of
incorporation and by-laws or code of regulations (or other governing document)
of the Company and any wholly-owned subsidiary, as may be amended or restated
from time to time.
(b) ▇▇▇▇▇▇▇
shall indemnify the Company against any and all losses incurred by the Company
as a result of ▇▇▇▇▇▇▇’▇ acts of willful misconduct or fraud.
15. ASSIGNMENT.
This
Agreement is a personal services contract and it is expressly agreed that the
rights and interests of ▇▇▇▇▇▇▇ hereunder may not be sold, transferred,
assigned, pledged or hypothecated (other than by will or the laws of descent
and
distribution).
16. BINDING
EFFECT.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
their heirs, representatives and permitted successors and assigns.
17. SEVERABILITY.
In case
any one or more of the provisions contained in this Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement
shall
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
18. BLUE-PENCILLING.
If at
any time it shall be determined that any of the provisions of this Agreement
are
unreasonable as to time or area, or both, by any court of competent
jurisdiction, the Company shall be entitled to enforce such provision for such
period of time and within such area as may be determined to be reasonable by
such court.
19. REPRESENTATIONS
OF ▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇
represents and warrants, on behalf of himself, his immediate family and any
person, firm or corporation in which he has a substantial interest,
that:
(a) They
are
not indebted to the Company in any amount whatsoever;
(b) They
do
not, and will not during the Restricted Period, have any direct or indirect
ownership interest in any entity with which the Company has a business
relationship or competes with the Company; provided,
however,
that
the ownership of, or investments in, at no time exceeding 5% of the issued
and
outstanding capital stock of an entity with annual revenues in excess of $20
million shall not constitute a breach of this representation and
warranty;
(c) They
are
not and will not become, during the Advisory Period, directly or indirectly,
interested in any material contract with the Company (other than this
Agreement); and
(d) The
execution of this Agreement or his employment by the Company will not breach
any
agreement or covenant entered into by him that is currently in
effect.
Excluded
from the foregoing representations and warranties are transactions disclosed
to
the Board done on terms at least as favorable to the Company as those which
it
could otherwise have obtained from unrelated third parties.
20. CONFLICTS
OF INTEREST.
In the
event that ▇▇▇▇▇▇▇ engages in or contemplates engagement in a transaction which
does affect or could affect the business of the Company, ▇▇▇▇▇▇▇ agrees to
immediately disclose in writing to the Board all material information relating
to same. Additionally, in the event that the Company engages in or contemplates
engagement in a transaction in which ▇▇▇▇▇▇▇ has a financial or personal
interest, ▇▇▇▇▇▇▇ shall, immediately upon his learning of said engagement or
contemplated engagement, disclose in writing to the Board all material
information relating to said interest.
42
21. ACKNOWLEDGMENT.
▇▇▇▇▇▇▇
acknowledges that: (i) he has carefully read all of the terms of this
Agreement, and that such terms have been fully explained to him; (ii) he
understands the consequences of each and every term of this Agreement;
(iii) he has had sufficient time and an opportunity to consult with
his own
legal advisor prior to signing this Agreement; (iv) he had other employment
opportunities at the time he entered into this Agreement; (v) he
specifically understands that by signing this Agreement he is giving up certain
rights he may have otherwise had, and that he is agreeing to limit his freedom
to engage in certain employment during and after the termination of this
Agreement; and (vi) the limitations to his right to compete contained
in
this Agreement represent reasonable limitations as to scope, duration and
geographical area, and that such limitations are reasonably related to
protection which the Company reasonably requires.
22. NOTICES.
All
notices, requests, demands or other communications hereunder shall be sent
by
registered or certified mail to:
the
Company: Board
of
Directors
Hawk
Corporation
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Copy
to: ▇▇▇▇▇
▇.
▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.
One
Cleveland Center
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
▇.▇.
▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
23. CAPTIONS.
The
captions in this Agreement are included for convenience only and shall not
in
any way affect the interpretation or construction of any provision
hereof.
24. GOVERNING
LAW.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Ohio.
25. SUBMISSION
TO JURISDICTION.
The
Company may enforce any claim arising out of or relating to this Agreement,
or
arising from or related to the advisory relationship existing in connection
with
this Agreement in any state or federal court having subject matter jurisdiction
and located in Cleveland, Ohio. For the purpose of any action or proceeding
instituted with respect to any such claim, ▇▇▇▇▇▇▇ hereby irrevocably submits
to
the jurisdiction of such courts and irrevocably consents to the service of
process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to ▇▇▇▇▇▇▇ and agrees that such service, to the fullest extent
permitted by law, (i) shall be deemed in every respect effective service
of
process upon him in any such suit, action or proceeding, and (ii) shall
be
taken and held to be valid personal service upon and personal delivery to him.
Nothing herein contained shall affect the right of the Company to serve process
in any other manner permitted by law or preclude the Company from bringing
an
action or proceeding in respect hereof in any other country, state or place
having jurisdiction over such action. ▇▇▇▇▇▇▇ irrevocably waives, to the fullest
extent permitted by law, any objection which he has or may have to the laying
of
the venue of any such suit, action or proceeding brought in any such court
located in Cleveland, Ohio, and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient
forum.
26. WAIVER
OF BREACH.
The
waiver by either party of a breach of any provisions of this Agreement shall
not
operate or be construed as a waiver of any subsequent breach.
27. AMENDMENT.
This
Agreement may be amended only in a writing executed by both parties
hereto.
28. ENTIRE
AGREEMENT.
This
Agreement and the Wage Continuation Agreement between the Company and ▇▇▇▇▇▇▇
constitute the entire agreement between the parties and this Agreement
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral, of the parties hereto
relating to the transactions contemplated by this Agreement and the Wage
Continuation Agreement. No course of conduct or dealing between the parties
shall be deemed to amend this Agreement.
43
IN
WITNESS WHEREOF, the undersigned have hereunto set their hand as of the date
first written above.
HAWK
CORPORATION
By:/s/
▇▇▇▇▇▇ ▇.. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Its: President
and Chief Executive Officer
Attested
to:
By:/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇▇
Its: Secretary
By:/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
44