Exhibit 10.28
SECOND AMENDMENT
TO EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is made and
entered into as of this 31st day of December 2008, by and between HAWK
CORPORATION, a Delaware corporation which maintains a place of business at 200
Public Square, Suite 1500, Cleveland Ohio 44114 (“Employer”), and JOSEPH J.
LEVANDUSKI, an individual who resides at 9979 Barr Road, Brecksville, Ohio 44141
( “Employee”)

RECITALS:

A.  
Employer and Employee are parties to an Employment Agreement dated as of August
14, 2006 (the “Original Agreement”).

B.  
Employer, Employee and Hawk Corporation, a Delaware corporation which maintains
a place of business at 200 Public Square, Suite 1500, Cleveland Ohio 44114,
amended the Original Agreement in Amendment to Agreements dated as of November
10, 2006 (the “OA Amendment No. 1,” and together with the Original Agreement,
the “Amended Original Agreement”).

C.  
In order to ensure compliance with Section 409A of the Internal Revenue Code of
1986, as amended, and the U.S. Department of Treasury regulations and other
interpretive guidance issued thereunder, Employer and Employee desire to further
amend the Amended Original Agreement as set forth in this Amendment.

ACCORDINGLY, in consideration of the promises hereinafter set forth in this
Amendment, the parties agree as follows:

1. Changes to Section 4 of the Amended Original Agreement. Employer and Employee
hereby agree that Section 4 of the Amended Original Agreement is hereby deleted
from the Amended Original Agreement in its entirety and is replaced by the
following new Section 4:

4.           Compensation.

(a) For services rendered pursuant to this Agreement, and for the covenants and
agreements of Employee set forth herein, Employee shall receive the
following:  (i) a base salary at the rate of $22,916.67 per month (annual rate:
$275,000) payable in accordance with the normal payroll procedures of Employer,
which amount is subject to annual review and possible increase at the discretion
of Chairman, with the advice and consent of the Compensation Committee of the
Board of Directors of Employer (the “Compensation Committee”); (ii) an
opportunity to earn incentive compensation on annual basis, in such amount and
manner as may be determined by the Chairman, with the advice and consent of the
Compensation Committee, with respect to a particular year; provided, however,
that Employee must be actively employed by Employer at the end of a year in
order to earn incentive compensation with respect to that year; notwithstanding
the foregoing, in the year of termination of Employee's employment, if the
termination is under circumstances which entitle Employee to receive severance
pay pursuant to the Control Agreement or Section 5(b) below, Employee shall earn
a pro rata portion (computed as the number of days worked during the year
divided by 365) of such incentive compensation for the year in which the
termination occurs; (iii) four (4) weeks of vacation per year; provided,
however, that unused vacation may not be carried over to a subsequent year; (iv)
the right to participate in the standard benefits which Employer provides to all
of its employees; (v) the right to participate in Employer’s 1997 Stock Option
Plan and 2000 Long Term Incentive Plan (collectively, the “Plans”) in accordance
with and subject to all of the terms and conditions contained in the Plans,
subject to the execution of such documents as may be required by the
Compensation Committee appointed pursuant to the Plans; and (vi) such other
benefits and/or perquisites as may be provided at the discretion of the Chairman
from time to time.

(b) To ensure compliance with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and the U.S. Department of Treasury regulations and
other interpretive guidance issued thereunder, each as in effect from time to
time (collectively, “Section 409A”), no payment under Section 4(a)(i) or
4(a)(ii) above shall be made later than March 15 of the calendar year following
the calendar year in which the amount was earned and accrued.

2. Changes to Section 5 of the Amended Original Agreement.  Employer and
Employee hereby agree that Section 5 of the Amended Original Agreement is hereby
amended as follows:

(a)  
The first two sentences of Section 5(b) are deleted from the Amended Original
Agreement in their entirety and are replaced by the following:

Subject to the terms of subparagraph (a) above, in the event of the termination
of Employee's employment by Employer for a reason other than for “Cause”,
Employer (i) will continue to pay to Employee the “Annual Salary” for a period
of twenty four (24) months following the date of termination, (ii) will continue
to provide to Employee and his family “Basic Medical Coverage” and “Executive
Medical Benefits” (as hereinafter defined) for a period of twenty four (24)
months following the date of termination, and (iii) will cause the Incentive
Stock Options which have been granted to Employee and are not exercisable, to
become immediately exercisable, effective on the date of termination.  In
addition, Employee shall be entitled to receive payment for any earned vacation
which he had not used as of the date of termination (the “Vacation Severance
Amount”).
 
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(b)  
The first sentence of Section 5(c) is deleted from the Amended Original
Agreement in its entirety and is replaced by the following:

The continuation of Annual Salary, Basic Medical Coverage and Executive Medical
Benefits, the vesting of certain stock options, and the payment of the Vacation
Severance Amount as described in subparagraph (b) above (collectively, the
“Severance Benefits”) are intended by the parties to be in settlement of any and
all claims of Employee arising out of or related to Employee’s employment with
Employer, including, without limitation, the termination of such employment, any
express or implied employment agreement, this Agreement, or the breach thereof
(collectively, “Employment Claims”).
 
(c)  
The third sentence of Section 5(c) is deleted from the Amended Original
Agreement in its entirety and is replaced by the following:

Employee shall execute a General Waiver and Release of Claims form substantially
the same as the “Release” which is attached to the Control Agreement as Exhibit
A thereto (the “Release”), and Employer’s obligation to provide the Severance
Benefits shall be conditioned upon the execution and delivery by Employee of
such a release.

(d)  
Section 5(e) of the Amended Original Agreement is deleted from the Amended
Original Agreement in its entirety and is replaced by the following new Section
5(e):

Employer’s obligation to provide the Severance Benefits shall also be subject
to, and conditioned upon, Employee's waiver of any other cash severance payment
or other benefits provided Employer or its affiliates pursuant to any other
severance agreement with Employee (the “Severance Waiver”).  No amount shall be
payable under this Agreement to, or on behalf of, Employee unless and until the
Employee has executed and delivered such a Severance Waiver, in a form to be
presented by Employer.

(e)  
The following is added in its entirety as Section 5(f) of the Agreement:

(f)           Section 409A.  To ensure compliance with Section 409A, Employer
shall pay:

(i) the amount payable under Section 5(b)(i) in accordance with the normal
payroll procedures of Employer in effect as of the Effective Date;

(ii) the Vacation Severance Amount in a lump sum payment by no later than March
15 of the calendar year following the year of the termination of Employee’s
employment with the Company under Section 5(b) above; and

(iii) to the extent that any continued payments or reimbursements of Basic
Medical Coverage and Executive Medical Benefits under Section 5(b)(ii) above are
deemed to constitute taxable compensation to Employee, any such payment due to
Employee shall be paid to Employee on or before the last day of Employee’s
taxable year following the taxable year in which the related expense was
incurred.  The amount of any such payments eligible for reimbursement in one
year shall not affect the payments or expenses that are eligible for payment or
reimbursement in any other taxable year, and Employee’s right to such payments
or reimbursement shall not be subject to liquidation or exchange for any other
benefit.

3. Changes to Section 6 of the Amended Original Agreement.  Employer and
Employee hereby agree that Section 6 of the Amended Original Agreement is hereby
amended as follows:

(a)  
Section 6 of the Amended Original Agreement is redesignated in its entirety as
Section 6(a).

(b)  
The following is added in its entirety as Section 6(b) of the Amended Original
Agreement:

To ensure compliance with Section 409A, Employer shall pay (i) all amounts
payable under Section 6(a)(i) in accordance with the normal payroll procedures
of Employer in effect as of the Effective Date beginning with the first pay
period (determined in accordance with Employer’s normal payroll procedures)
following the date of Employee’s death and (ii) to the extent that any continued
payments or reimbursements of Basic Medical Coverage and Executive Medical
Benefits under Section 6(a)(ii) above are deemed to constitute taxable
compensation, any such payment due to Employee’s family shall be paid on or
before the last day of the calendar year following the taxable year in which the
related expense was incurred.  The amount of any such payments eligible for
reimbursement in one year shall not affect the payments or expenses that are
eligible for payment or reimbursement in any other taxable year, and the right
of Employee’s family to such payments or reimbursement shall not be subject to
liquidation or exchange for any other benefit.
 
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4. Changes to Section 7 of the Amended Original Agreement.  Employer and
Employee hereby agree that the following is hereby added as the second sentence
of Section 7(a) of the Amended Original Agreement:

To ensure compliance with Section 409A, Employer shall pay all amounts payable
under this Section 7(a) in accordance with the normal payroll procedures of
Employer in effect as of the Effective Date beginning with the first pay period
(determined in accordance with Employer’s normal payroll procedures) following
the date on which the disability is deemed to have occurred (as determined under
Section 7(c) below).

5. Addition of Section 20 to the Amended Original Agreement.  Employer and
Employee hereby agree that the following is hereby added in its entirety as
Section 20 of the Amended Original Agreement:

20.           Section 409A.

(a)  
To the extent applicable, this Agreement shall be interpreted in accordance with
Section 409A.

 
(b)  
If Employee is a “specified employee” (within the meaning of Treasury Regulation
Section 1.409A-1(i)), as determined by Employer in accordance with Section
409A,  as of the date of Employee’s separation from service (within the meaning
of Treasury Regulation Section 1.409A-1(h)), to the extent that any payments or
benefits under this Agreement are subject to Section 409A and the delayed
payment or distribution of all or any portion of such amounts to which Employee
is entitled under this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, then such portion
deferred under this Section 20(b) shall be paid or distributed (without
interest) to Employee in a lump sum on the earlier of (i) the date that is six
(6) months following termination of Employee’ s employment, (ii) a date that is
no later than thirty (30) days after the date of Employee’s death or (iii) the
earliest date as is permitted under Section 409A.  For purposes of clarity, the
six (6) month delay shall not apply in the case of severance pay contemplated by
Treasury Regulation Section 1.409A-1(b)(9)(iii) to the extent of the limits set
forth therein.  Any remaining payments due under this Agreement shall be paid as
otherwise provided herein.

(c)  
Notwithstanding anything to the contrary in this Agreement, Employer shall be
under no obligation to provide the Severance Benefits described in Section 5(b)
of this Agreement unless Employee shall have executed the Release and the
Severance Waiver (and the applicable revocation period shall expired) within
fifty-five (55) days following the date of Employee’s termination of
employment.  The payment of the amounts payable under Section 5(b)(i) shall
begin no later than sixty (60) days following the date of termination of
employment or death, as applicable.

(d)  
For purposes of Section 409A (including, without limitation, for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(iii)), Employee’s right to receive
the installment payments described in Sections 5(b)(i) and 7(a) shall be treated
as a right to receive a series of separate payments and, accordingly, each
installment payment shall at all times be considered a separate and distinct
payment.

(e)  
Notwithstanding anything herein to the contrary, to the extent any of the
amounts payable under Sections 5(b) and 7(a) are treated as non-qualified
deferred compensation subject to Section 409A, then no portion of such amounts
shall be payable to Employee until Employee’s termination of employment
constitutes a “separation from service,” as defined in Treasury Regulation
Section 409A-1(h) (and any successor provision thereto).”

 
 
(f)
To the maximum extent permitted by applicable law, the amounts payable to
Employee under this Agreement shall be made in reliance upon Treasury Regulation
Section 1.409A-1(b)(9) (with respect to separation pay plans) or Treasury
Regulation Section 1.409A-1(b)(4) (with respect to short-term deferrals).

(g)  
As provided in Internal Revenue Notice 2007-86, notwithstanding any other
provision of this Agreement, with respect to an election or amendment to change
a time and form of payment under this Agreement that is subject to Section 409A
made on or after January 1, 2008 and on or before December 31, 2008, the
election or amendment may apply only to amounts that would not otherwise be
payable in 2008 and may not cause an amount to be paid in 2008 that would not
otherwise be payable in 2008.

6. Full Force and Effect.  Except to the extent specifically modified in this
Amendment, each and every provision of the Amended Original Agreement remains in
full force and effect.

7. Miscellaneous.  The parties intend that the validity, performance and
enforcement of this Amendment shall be governed by the laws of the State of
Ohio.  In the event of any claim arising out of or related to this Amendment, or
the breach thereof, the parties intend to and hereby confer jurisdiction to
enforce the terms of this Amendment upon the courts of any jurisdiction within
the State of Ohio, and hereby waive any objections to venue in said courts.  In
the event of any conflict between the original terms of the Amended Original
Agreement and this Amendment, the terms of this Amendment shall prevail.
 
<Signature follows> 
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the date
first hereinabove mentioned.
HAWK CORPORATION
(“Employer”)

By:/s/ Byron S. Krantz
Its: Secretary

/s/ Joseph J. Levanduski
Joseph J. Levanduski (“Employee”)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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