First Amendment to Restated Wage Continuation Agreement


    Exhibit
      10.2

    


    FIRST
      AMENDMENT TO RESTATED

    WAGE
      CONTINUATION AGREEMENT

    


    THIS
      FIRST AMENDMENT TO RESTATED WAGE CONTINUATION AGREEMENT (the “First Amendment”)
      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, individually (“Harbert”).

    RECITALS:

    A. WHEREAS,
      the parties and Friction Products Co. (“Friction”) are parties to the Amended
      and Restated Wage Continuation Agreement dated as of December 31, 2001
      (the
“Restated Agreement”);

    B. WHEREAS,
      Friction is no longer a necessary party; and

    C. WHEREAS,
      the remaining parties desire to further amend the Restated Agreement in
      accordance with the terms set forth in this First Amendment.

    NOW
      THEREFORE, in consideration of the premises and of the mutual promises herein
      contained, the parties hereto agree as follows:

     

    1. Consideration.
      Section
      1(a) of the Restated Agreement is hereby deleted and replaced in its entirety
      with the following:

    (a) In
      consideration of Harbert remaining in its employ as a Senior Advisor, the
      Company agrees that (i) in the event of death of Harbert while Harbert
      is
      in the active employ of the Company under the Senior Advisor Agreement by and
      between the Company and Harbert dated 11th
      day of
      October, 2005, as of June 1, 2005 (the “Advisor Agreement”), or
      (ii) in the event of death of Harbert at any time after he had been
      receiving “Disability Wage Continuation Payments” (as such term is defined in
      the Advisor Agreement), the Company shall pay to the Spouse a monthly payment
      equal to the Tentative Payment Amount divided by sixty percent (60%)
      (the
“Wage Continuation Payment”) less any applicable withholding taxes. The term
“Tentative Payment Amount” shall equal Twelve Thousand Five Hundred Dollars
      ($12,500) less the After-Tax Monthly Spousal Annuity and in no event shall
      be
      less than zero; the term “After-Tax Monthly Spousal Annuity” shall mean the
      Monthly Spousal Annuity less Taxes Payable; and the term “Taxes Payable” shall
      mean the portion of the Monthly Spousal Annuity subject to federal income taxes
      multiplied by forty percent (40%); provided further that the foregoing
      monthly payment shall be reduced (but not below zero) by the amount of any
      disability insurance payments made to Harbert or his spouse under any insurance
      plans provided and paid for by the Company or any of its affiliates and any
      payments made to Harbert or his spouse under any non-contributory defined
      benefit plan maintained by the Company or any of its affiliates. The phrase
      “mentally or physically disabled” shall have the meaning ascribed to it in the
      Advisor Agreement. If the Trustee makes a determination not to purchase the
      Monthly Spousal Annuity upon the death of Harbert while the Spouse is living
      or
      if Harbert designates someone other than the Spouse directly or indirectly
      through the Trust as the beneficiary of the Insurance Benefit, the Monthly
      Spousal Annuity will be deemed to equal the monthly annuity amount that could
      otherwise have been purchased by the Trustee for the Spouse if such a
      determination had not been made. The Wage Continuation Payment shall be payable
      to the Spouse in equal monthly installments commencing with the first day of
      the
      first month following the month of Harbert’s death and shall continue monthly
      until the death of the Spouse.

     

    2. Termination.
      Section 2A of the Restated Agreement is hereby deleted and replaced
      in its
      entirety with the following:

    A. The
      employment of Harbert by the Company is terminated for any reason other than
      his
      (i) death or (ii) Harbert becoming mentally or physically disabled.
      Nothing contained herein shall be construed to be a contract of employment
      for
      any term of years, nor as conferring upon Harbert the right to continue in
      the
      employ of the Company in any capacity. It is expressly understood by the parties
      thereto that this Agreement relates exclusively to salary continuation benefits
      in return for Harbert’s services and is not intended to be an employment
      contract.

     

    3. Express
      Changes Only.
      Except
      as set forth in this First Amendment, all of the terms and provisions of the
      Restated Agreement shall remain unmodified and in full force and
      effect.

     

    4. Captions.
      The
      captions in this First Amendment are included for convenience only and shall
      not
      in any way affect the interpretation or construction of any provision
      hereof.

     

    5. Governing
      Law.
      This
      First Amendment shall be governed by, and construed and enforced in accordance
      with, the laws of the State of Ohio.

     

    6. Submission
      to Jurisdiction.
      The
      Company may enforce any claim arising out of or relating to this First
      Amendment, or arising from or related to the employment relationship existing
      in
      connection with this First Amendment in any state or federal court having
      subject matter 

    
      
        
        

      

      
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      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.

       

    

    7. Counterparts.
      This
      First Amendment may be executed in any number of counterparts, each of which
      when executed and delivered shall be deemed to be an original and all such
      counterparts together, shall constitute one and the same instrument. The
      execution and delivery of facsimiles of this First Amendment shall be binding
      on
      the parties hereto.

     

    8. Entire
      Agreement, Amendments and Waivers.
      There
      are and were no oral or written representations, warranties, understandings,
      stipulations, agreements, or promises made by any party, or by any agent,
      employee, or other representative of any party, pertaining to the subject matter
      of this First Amendment which have not been incorporated into this First
      Amendment. This First Amendment shall not be modified, changed, terminated,
      amended, superseded, waived, or extended except by a written instrument executed
      by the party or parties against whom enforcement is sought.

    [Signature
      Page Follows]


    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

    


    


    FRICTION
      PRODUCTS CO.

    


    


    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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