Senior Advisor Agreement


    Exhibit
      10.1

    


    SENIOR
      ADVISOR AGREEMENT

     

    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 NORMAN C.
      HARBERT (“Harbert”).

    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 Harbert 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 Harbert
      agree as follows:

        

        1. EMPLOYMENT.
      The
      Company hereby employs Harbert as a senior advisor and Harbert 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 Harbert, of such employment is herein referred to as the “Advisory
      Period.”

     

    2. COMPENSATION
      AND BENEFITS.
      Provided
      that Harbert’s employment hereunder is not terminated in accordance with this
      Agreement, during the Advisory Period Harbert 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
      Harbert under (i) any non-contributory defined benefit plan maintained
      by
      the Company (“Defined Benefit Payments”) and (ii) any disability or similar
      policy.

    (b) Harbert
      Benefit Programs:
      Harbert
      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, Harbert 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 Ronald E. Weinberg (“Weinberg”) but not to
      exceed $250,000.

    (d) Business
      Expenses:
      The
      Company shall promptly reimburse Harbert for all reasonable and necessary
      business expenses incurred by Harbert on behalf of the Company and its parent,
      wholly-owned subsidiaries or affiliated entities during the Advisory Period.
      Harbert shall submit to the Company appropriate expense reports that detail
      such
      expenses and includes copies of receipts where appropriate.

    (e) Office:
      Harbert
      shall retain the office he is presently housed in or its equivalent.


    (f) Automobile
      Expenses:
      Harbert
      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 Harbert’s automobile and reimburse Harbert for the
      reasonable maintenance and repair costs incurred with respect to Harbert’s
      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 Harbert. Such insurance policies shall continue to be
      subject to the applicable split-dollar agreements between the Company and
      Harbert.

     

    3. ADJUSTMENTS
      TO COMPENSATION. Harbert
      hereby authorizes the Company to withhold and withdraw from amounts payable
      to
      Harbert under this Agreement all applicable amounts required by federal, state
      and local laws.

     

    4. DUTIES.
      Harbert
      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 Harbert shall mutually agree to serve from time to
      time and in such 

    
      
        
        

      

      
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      capacity.
        Harbert's title shall be Chairman Emeritus of the Board and Founder. During
        the
        Advisory Period, Harbert 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. Harbert
        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 Harbert 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 Harbert 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. Harbert 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, Harbert 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
      Harbert. 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 Weinberg, as long as
      he
      remains Chief Executive Officer of Hawk and any successor to Weinberg as Chief
      Executive Officer of Hawk, to consult in advance with Harbert on each of the
      matters set forth below; provided that each of the Company and Harbert
      understand and agree that Harbert’s 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) Harbert
      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 Harbert should die during the Advisory Period and:

    (a) at
      the
      time of Harbert’s death, Harbert 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 Harbert 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
      Harbert’s wife the amount of bonus which Harbert would have received under
      Section 2(c) hereof for the year of Harbert’s 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 Harbert’s wife to the maximum extent allowable in all respects under
      applicable law; provided,
      however,
      that
      Harbert’s 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 Harbert’s death, Harbert has no wife, then the Company shall:
      (i) for a period of two (2) years, continue to pay Harbert’s Base
      Wages at the same monthly rate earned by Harbert immediately prior to his death
      to Harbert’s beneficiaries or estate; and (ii) pay to Harbert’s
      beneficiaries or his estate, the amount of bonus which the Harbert would have
      received under Section 2(c) hereof for the year of Harbert’s 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 Harbert’s employment hereunder at any time for cause,
        which shall be deemed to include the following: (i) Harbert’s engaging in
        fraud, misappropriation of funds, embezzlement or like conduct committed
        against
        the Company; or (ii) Harbert’s conviction of a felony.

    

    
      
        
        

      

      
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    (b) Harbert’s
      employment hereunder may be terminated by the Company in the event of Harbert’s
      voluntarily leaving the employ of the Company.

    (d) In
      the
      event that Harbert’s employment with the Company is terminated by the Company or
      by Harbert, 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.
      Harbert
      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. Harbert 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 Harbert’s employment hereunder (the “Restricted Period”), Harbert
      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 Harbert’s 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.
      Harbert
      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, Harbert 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 Harbert 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.
      Harbert
      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 Harbert 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 Harbert’s employment with
      the Company, or (ii) at any other time at the Company’s request. Harbert
      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 Harbert 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.

    

    
      
        
        

      

      
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    13. DISCLOSURE.
      The
      Company may notify anyone employing Harbert or evidencing an intention to employ
      Harbert as to the existence and provisions of this Agreement and of the
      Restrictive Covenants.

     

    14. INDEMNIFICATION.

    (a) The
      Company shall indemnify Harbert (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) Harbert
      shall indemnify the Company against any and all losses incurred by the Company
      as a result of Harbert’s 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 Harbert 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 HARBERT.
      Harbert
      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 Harbert engages in or contemplates engagement in a transaction which
      does affect or could affect the business of the Company, Harbert 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 Harbert has a financial or personal
      interest, Harbert shall, immediately upon his learning of said engagement or
      contemplated engagement, disclose in writing to the Board all material
      information relating to said interest.

    
      
        
        

      

      
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    21. ACKNOWLEDGMENT.
      Harbert
      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

                200
      Public Square, Suite 1500

                Cleveland,
      Ohio 44114-2301

    


    Copy
      to:  Byron
      S.
      Krantz, Esq.

            Kohrman
      Jackson & Krantz P.L.L.

            One
      Cleveland Center

            1375
      East Ninth Street, 20th
      Floor

            Cleveland,
      Ohio 44114

    


    Harbert:   Norman
      C.
      Harbert

                P.O.
      Box 127

                Hiram,
      OH 44234

    


    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, Harbert 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 Harbert 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. Harbert 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 Harbert
      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.

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned have hereunto set their hand as of the date
      first written above.

    HAWK
      CORPORATION

    


    


    By:/s/
      Ronald E.. Weinberg 

    Ronald
      E.
      Weinberg

    Its: President
      and Chief Executive Officer

    


    Attested
      to:

    


    By:/s/
      Byron S. Krantz 

    Byron
      S.
      Krantz

    Its: Secretary

    


    


    By:/s/
      Norman C. Harbert 

    Norman
      C.
      Harbert

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
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