Joseph Levanduski Employee Agreement


    EXHIBIT
      10.1

    


    EMPLOYMENT
      AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT (the
      “Agreement”) is made and entered into this 14th
      day of
      August, 2006, by and between HAWK
      CORPORATION,
      a
      Delaware corporation which maintains a place of business at 200 Public Square,
      Suite 1500, Cleveland Ohio 44114 (hereinafter referred to as “Employer”), and
JOSEPH J.
      LEVANDUSKI,
      an
      individual who resides at 9979 Barr Road, Brecksville, Ohio 44141 (hereinafter
      referred to as “Employee”).

    


    R
      E C I T A L S :

    


    A. Employer
      is engaged in the business of the business of designing, engineering,
      manufacturing and marketing friction materials and powder metal components
      used
      in a wide variety of aerospace, industrial, construction and other commercial
      applications (the “Company Business”).

    


    B. Employee
      is currently employed by Employer as its Chief Financial Officer, on an “at
      will” basis, which employment is terminable by either party at any time for any
      reason or no reason.

    


    C. The
      work
      of Employee for Employer has brought and is expected to continue to bring
      Employee into close contact with many confidential affairs of Employer not
      readily available to the public.

    


    D. The
      parties are also contemplating entering into an agreement captioned “Change in
      Control Agreement” (hereinafter, the “Control Agreement”), a copy of which is
      attached hereto as Exhibit A.

    


    E. The
      parties now desire to modify the employment relationship and establish certain
      protections and obligations, in the manner set forth in this Agreement and
      in
      the Control Agreement.

    


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

    


    1. Effective
      Date.
      This
      Agreement shall be effective on the first date after the execution by both
      of
      the parties of both this Agreement and the Control Agreement (the “Effective
      Date”).

    


    2. Position,
      Duties and Responsibilities.
      Employer
      hereby employs Employee, and Employee agrees to be employed by Employer, as
      its
      Chief Financial Officer, or to such other senior management position as the
      parties may define by mutual agreement. During the “Employment Period” (as
      hereinafter defined), the Chairman of the Board of Directors of Employer (the
      “Chairman”) or his designee shall be entitled to establish the business hours,
      conditions of employment, reporting relationships, job assignments, duties
      and
      responsibilities of Employee hereunder, and to modify the foregoing from time
      to
      time. Those duties include, without limitation, the duties set forth on the
      job
      description attached hereto as Exhibit B. As of the date hereof, Employee shall
      report to the Chairman. Employee shall devote all of his business efforts to
      the
      business of Employer.

    


    3. Employment
      Period.
      The
      term
      of this Agreement shall be five (5) years, commencing on the Effective Date
      (hereinafter referred to as the “Employment Period”). Thereafter, the Employment
      Period may be extended for additional one year (1) periods, in each case upon
      the written agreement of the parties.

    


    


    


    


    


    


    


     

    
      
        
        

      

      
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    4. Compensation.
      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), 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 the Corporation (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 the Hawk
      Corporation 1997 Stock Option Plan and the 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 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.

    


    5. Severance. 

    


    (a) The
      parties acknowledge and agree that (i) certain severance benefits may be
      provided to Employee pursuant to provisions of the Control Agreement, and (ii)
      Employee shall not be entitled to any of the “Severance Benefits” described in
      this Paragraph 5 if he is entitled to any severance benefits pursuant to the
      terms of the Control Agreement.

    


    (b) 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
      will continue to pay to Employee the “Annual Salary” for a period of twenty four
      (24) months following the date of termination, and 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. In addition, Employee shall be entitled
      to
      receive payment for any earned vacation which he had not used as of the date
      of
      termination. For purposes of this Agreement, the definition of “Annual Salary”
shall be identical to the definition of “Annual Salary” set forth in Section
      1.1(e) of the Control Agreement, and the definition of “Cause” shall be
      identical to the definition of “Cause” set forth in Section 1.1(k) of the
      Control Agreement, and each of those definitions is incorporated herein to
      the
      same extent as if it had been fully rewritten in this Agreement. For purposes
      hereof, “Basic Medical Coverage” shall mean the same group medical insurance
      coverage as is provided to all salaried employees, and “Executive Medical
      Benefits” shall mean the additional medical benefits that are provided (if any)
      from time to time to high level executives only, in each case on the same basis
      as such benefits had been provided immediately prior to the termination and
      subject to the provisions of the applicable plans.

    


    (c) The
      continuation of Annual Salary, Basic Medical Coverage and Executive Medical
      Benefits 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”). In consideration of Employer providing the
      Severance Benefits, upon his acceptance of any of the Severance Benefits, and
      without further action by Employee, Employee will be deemed to have released
      and
      waived any and all Employment Claims against Employer, and will be deemed to
      have covenanted not to sue Employer in connection with any Employment Claim,
      and
      Employee hereby so releases, waives and covenants. If Employer so requests,
      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, in which event Employer’s obligation to provide the Severance
      Benefits shall be conditioned upon the execution and delivery by Employee of
      such a release. 

    


    (d) In
      further consideration for such release and waiver and covenant not to sue,
      it is
      agreed that Employee shall not be required to mitigate damages, by seeking
      other
      employment or otherwise, and Employer shall not be entitled to set off against
      amounts payable to Employee pursuant to this subparagraph any amounts earned
      by
      Employee from other employment during the balance of the Employment
      Period.

    


    
      
        
        

      

      
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    (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. 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 waiver, in a form to be presented by Employer.

    


    6. Death
      of Employee.
      If
      Employee should die during the Employment Period, Employer (i) shall continue
      to
      pay compensation to Employee’s wife (or if at the time of Employee’s decease
      Employee has no wife, then to his beneficiaries) for a period of one year,
      at
      the rate of compensation earned by Employee immediately prior to his death,
      and
      (ii) shall continue to provide the Basic Medical Coverage and Executive Medical
      Benefits (as defined in paragraph 5(b) above) to Employee’s family for a period
      of one year. Employer shall have no further duties or obligations to Employee
      pursuant to this Agreement.

    


    7. Disability
      of Employee.

     

    (a) In
      the
      event that Employee shall become mentally or physically disabled (as hereinafter
      defined) during the Employment Period, Employer shall continue to pay
      compensation to Employee, at the rate of compensation earned by Employee
      immediately prior to his disability, for a period of one year after the onset
      of
      such disability. If, at the end of such period, Employee shall continue to
      be so
      disabled Employer may elect, upon ten days prior written notice, to discontinue
      payments of compensation, and to terminate this Agreement, and Employer shall
      have no further duties or obligations hereunder.

    


    (b) For
      purposes of this paragraph 7, Employee shall become “mentally or physically
      disabled” if he is unable to perform the essential functions of his position,
      with or without reasonable accommodation. In the event that Employee believes
      that he would be able to perform the essential functions of his position with
      a
      reasonable accommodation, the parties shall engage in an interactive process
      concerning such possible accommodation, in accordance with applicable law. If
      Employee submits information from one or more physicians in support of that
      position, Employee hereby agrees to submit to examinations from one or more
      physicians selected by Employer, so long as the physicians selected by Employer
      are paid by Employer.

    


    (c) The
      date
      on which the disability will be deemed to have occurred shall be the day after
      Employee last performed the services for Employer which are required of him
      pursuant to this Agreement, which performance of services was discontinued
      because of the mental or physical disability described herein.

    


    8. Restrictive
      Covenants.
      The
      provisions of the restrictive covenants contained in Exhibit B to the Control
      Agreement (hereinafter, the “Restrictive Covenants”) are incorporated herein to
      the same extent as if they had been fully rewritten in this Agreement; except
      that, for purposes of this Agreement only, certain of the Restrictive Covenants
      shall be modified to provide as follows:

    


    (a) The
      definition of the “Restricted Period” which is set forth in the first sentence
      of Section 3 of the Restrictive Covenants is hereby modified by changing the
      phrase “one (1) year following the termination of such employment” to read “two
      (2) years following the termination of such employment”.

    


    (b) The
      initial phrase of Section 6 of the Restrictive Covenants is hereby modified
      by
      changing the phrase “During
      and for a period of two (2) years after the expiration of the Restricted Period”
to
      read
“During the Restricted Period”.

    


    The
      Restrictive Covenants, as modified in this paragraph, shall survive the
      termination of this Agreement, however caused.

    


    9. Disclosure.
      Employer
      may notify anyone employing Employee or evidencing an intention to employ
      Employee as to the existence and provisions of this Agreement.

    


    10. Incorporation
      by Reference from Control Agreement.
      Whenever
      the text of this Agreement contains language to indicate, in essence, that
      a
      portion of the Control Agreement is incorporated herein to the same extent
      as if
      it had been fully rewritten in this Agreement (or words of similar meaning),
      and
      the text so incorporated herein includes the term “Executive” or the
“Corporation”, such terms shall have the following meanings in this Agreement:
      (i) “Executive” shall mean the Employee, and (ii) the Corporation shall mean the
      Employer, each of its subsidiary companies, each of the constituent entities
      of
      any of the foregoing, individually and collectively, and any successor of any
      of
      the foregoing (as described in Article V of the Control Agreement).

    
      
        
        

      

      
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    11. Governing
      Law and Jurisdiction.
      The
      parties intend that the validity, performance and enforcement of this Agreement
      shall be governed by the laws of the State of Ohio. In the event of any claim
      arising out of or related to this Agreement, or the breach thereof, the parties
      intend to and hereby confer jurisdiction to enforce the terms of this Agreement
      upon the courts of any jurisdiction within the State of Ohio, and hereby waive
      any objections to venue in said courts. 

    


    12. Binding
      Effect.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto,
      their heirs, representatives and successors.

    


    13. 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.

    


    14. Notices.
      All
      notices, requests, demands or other communications hereunder shall be sent
      by
      registered or certified mail to the parties at the addresses set forth on the
      first page of this Agreement, or to such other address as a party may designate
      by notice given pursuant to this paragraph.

    


    15. Effect
      of Captions.
      The
      captions in this Agreement are included for convenience only and shall not
      in
      any way effect the interpretation or construction of any provision
      hereof.

    


    16. Remedies
      Cumulative; No Waiver.
      All
      remedies specified herein or otherwise available shall be cumulative and in
      addition to any and every other remedy provided hereunder or now or hereafter
      available. No waiver or failure (intentional or unintentional) to act with
      respect to any breach or default hereunder shall be deemed to be a waiver with
      respect to any subsequent breach or default, whether of a similar or different
      nature.

    


    17. Governing
      Law; Jurisdiction: Limitations on Filing Actions.
      This
      Agreement shall be governed by and construed in accordance with the substantive
      law of the State of Ohio. The parties intend to and hereby do confer
      jurisdiction upon the courts of any jurisdiction within the State of Ohio to
      determine any dispute arising out of or related to this Agreement, including
      the
      enforcement and the breach hereof. The parties agree that any claim arising
      out
      of or related to this Agreement, or the breach hereof, must be filed within
      six
      (6) months after the date of the alleged breach, and in any event within six
      months after the date of termination of Employee’s employment, that any claim
      which is not filed within such six month period is waived, and that any statute
      of limitations to the contrary is hereby waived.

    


    18. Acknowledgment.
      Employee
      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 had other employment opportunities at the time he entered into
      this Agreement; (iv) 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 (v) 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 Employer reasonably
      requires.

    


    19. Entire
      Agreement.
      This
      Agreement embodies the entire agreement and understanding between Employer
      and
      Employee and supersedes all prior agreements and understandings relating to
      the
      subject matter hereof.

    


     

     

     

     

    
 

    
      
        
        

      

      
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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/
        Ronald E. Weinberg  

      Its: Chairman
        and Chief Executive Officer

      


      


      /s/
        Joseph J. Levanduski   

      Joseph
        J.
        Levanduski
        (“Employee”)

    

     

     

     

     

     

     

    EXHIBIT
      A

    


    THE
      CONTROL AGREEMENT

    


    


    


    


    See
      attached document.

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


     

    
      
        
        

      

      
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    EXHIBIT
      B

    


    JOB
      DESCRIPTION

    


    Title: Chief
      Financial Officer (CFO) for Hawk Corporation

    


    
      	
              Reporting
                Relationship:

            	
              Reports
                to the CEO

            


    

    


    
      	
              Education: 

            	
              Bachelor’s
                degree in accounting, plus a successful combination of training and
                work
                experience in a manufacturing environment, and a CPA is required.
                Master’s
                degree in finance / accounting is desirable.


            


    

    


    
      	
              Personal Characteristics: 

            	
              Excellent
                interpersonal skills (verbal and written); team player; able to work
                across organization lines to achieve results; good business skills;
                analytical and able to solve technical problems; able to visualize
                and
                conceptualize concepts ideas; able to quickly grasp and understand
                technical concepts and application; able to work up and down and
                across
                organization structure; able to work in a matrix/team based organization
                environment; high sense of urgency; outstanding problem solver; good
                analysis skills; strong personal computer skills Excel Access; high
                level
                of integrity; commitment to continuous improvement; understanding
                of
                modern accounting control and manufacturing theory and practice.
                

            


    

    


    Work Experience:  Minimum
      of 10 to 15 years of progressively responsible work experience resulting in
      a
      controller’s role for a publicly traded manufacturing company with an integrated
      computer system.

    


    Principal
      Area of Responsibility:  The
      primary focus of the CFO’s position is to direct the finance, accounting,
      information systems and control functions of the Company, maintain relationships
      with the investment and banking community, establish consistent policies and
      procedures throughout the organization to ensure timely and accurate financial
      information, oversee the Controllers consolidation of the divisional financial
      information, and ensure that all financial information is prepared in accordance
      with all GAAP and SEC reporting requirements. The CFO will establish, coordinate
      and administer an effective, on-going plan for the fiscal control of the
      operation including full P&L and Balance Sheet. The plan will include, but
      is not limited to, budgeting, cost control, profit maximization, SOX compliance,
      capital investing, cost standards, and SEC compliance. Further, the CFO will
      participate as a senior member of management in aligning the company’s financial
      goals and operations with its overall strategy. 

    


    Specific
      Duties:

     

    
      	·  	
              Financial
                reporting: Provide oversight and guidance to controllers in order
                to
                maintain accurate general ledger, balance sheet, in accordance with
                GAAP.

            


    

     

    
      	·  	
              Assure
                that financial reports are established that are required to properly
                manage the operations.

            


    

     

    
      	·  	
              Provide
                timely reporting of financial performance to SEC in according to
                GAAP.

            


    

     

    
      	·  	
              Establish
                the appropriate control environment to ensure compliance with Sarbanes
                Oxley requirements, and that are sufficient to provide a basis to
                provide
                appropriate certifications under Section 302 of the
                law.

            


    

     

    
      	·  	
              Review
                and consolidate the Annual Operating and Capital Budgets for Hawk
                Corporation and each of its
                divisions.

            


    

     

    
      	·  	
              Lead
                in the preparation of SEC disclosure information, and ensure that
                the
                divisional finance team is trained to understand SEC
                requirements.

            


    

     

    
      	·  	
              Conduct
                timely reviews of financial data submitted by facilities / divisions
                as
                necessary.

            


    

     

    
      	·  	
              Coordinate
                the preparation of all necessary information for external and internal
                audits.

            


    

    
      
        
        

      

      
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        	·  	
                Work
                  with manufacturing sites on elimination of errors and misrepresentation
                  of
                  information. 

              


      

       

    

    
      
        	·  	
                Maintain
                  integrity of informational systems used in the
                  organization.

              


      

       

    

    
      	·  	
              Facilitate
                the effectiveness of the information systems used at the divisional
                level,
                including QAD; and the financial consolidation package used at Hawk
                Corporation.

            


    

    


    
      	·  	
              Ensure
                proper documentation of manufacturing processes is developed and
                maintained for accurate inventory standards, inventory valuations,
                and
                control. 

            


    

    


    
      	·  	
              Be
                a point of contact for external auditors, and ensure efficient audits
                and
                quarterly reviews.

            


    

     

    
      	·  	
              Interpret
                manufacturing variances, and develop strategies to eliminate unfavorable
                results.

            


    

    


    
      	·  	
              Administratively
                direct the group and site controllers and all staff associated with
                the
                department.

            


    

    


    
      	·  	
              Provide
                input to the divisional controllers as they write annual performance
                appraisals and career planning processes for their
                staff.

            


    

    


    
      	·  	
              Investigate
                and provide corrective action for any issues uncovered during the
                course
                of the job. 

            


    

    


    
      	·  	
              Facilitate
                and provide leadership on company initiatives towards continuous
                improvement, including best cost initiatives.


            


    

    


    
      	·  	
              Establish,
                monitor and report on cost reduction
                programs;

            


    

     

    
      	·  	
              Support
                Operations in all financial related issues including short-term problem
                solving and long-term systems
                issues.

            


    

     

    
      	·  	
              Provide
                strategic input and leadership on corporate development projects
                (acquisitions, divestitures, etc.,)

            


    

     

    
      	·  	
              Provide
                the organization with appropriate financial structure to carry out
                strategic initiatives including bank and high yield debt, and equity
                options.

            


    

     

    
      	·  	
              Develop
                and maintain appropriate communications and relationships with the
                investment community.

            


    

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    


     

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