Document:

exhibit10_25.htm

    

      Exhibit
10.25

      AMENDED
AND RESTATED

      SENIOR
ADVISOR AGREEMENT

      

      

      THIS
AMENDED AND RESTATED SENIOR ADVISOR AGREEMENT (this “Agreement”) is made and
entered into the 30th day of
December, 2008, by and among HAWK CORPORATION, a Delaware corporation (“Hawk” or
the “Company”) and NORMAN C. HARBERT (“Harbert”).

      RECITALS

      

      A.           The
Company and Harbert are parties to the Senior Advisor Agreement dated as of June
1, 2005 (the “Senior Advisor Agreement”).

      B.           In
order to ensure compliance with Section 409A (as defined below), the parties
desire to amend and restate the Senior Advisor Agreement in its entirety as 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
amend and restate the Senior Advisor Agreement, 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 in
accordance with the Company’s normal payroll procedures (as adjusted from time
to time, the “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.  To ensure compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and the Department of Treasury
regulations and other interpretive guidance issued thereunder, each as in effect
from time to time (collectively, “Section 409A”), in no event shall any portion
of the Base Wages be paid later than March 15 of the calendar year following the
calendar year in which the Base Wages were earned and accrued.

      (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.  To ensure
compliance with Section 409A, any bonus payment payable under this Section 2(c)
shall be paid no later than March 15 of the calendar year following the calendar
year in which the amount was earned and accrued.

      (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.  To ensure compliance with Section 409A, reimbursed
business expenses payable under this Section 2(d) for each calendar year shall
be paid no later than March 15 of the calendar year following the calendar year
in which those expenses were incurred by Employee.

      (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 Company’s 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.  To ensure compliance with Section 409A, (i) car allowance
amounts shall be paid no later than March 15 of the calendar year following the
calendar year in which Employee’s right to each amount accrued and (ii)
reimbursed maintenance and repair costs shall be paid no later than March 15 of
the calendar year following the calendar year in which those expenses were
incurred by Employee.

      (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 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.

       

      
        
          
          

        

        
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          (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.

      (a)           In
the event Harbert should die during the Advisory Period and:

      (i)           at
the time of Harbert’s death, Harbert has a wife, then:  (A)
 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
are herein incorporated by reference; (B) 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 (C) 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

      (ii)           at
the time of Harbert’s death, Harbert has no wife, then the Company
shall:  (A) for a period of two (2) years, continue to pay
Harbert’s Base Wages at the same monthly amount earned by Harbert immediately
prior to his death to Harbert’s beneficiaries or estate; and (B) 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.

      (b)           To
ensure compliance with Section 409A, the Company shall pay:

      (i)           any
amount payable under Section 6(a)(i)(B) or (a)(ii)(B) by no later than March 15
of the calendar year following the year of Harbert’s death;

      (ii)           all
amounts payable under Section 6(a)(ii)(A) semi-monthly in accordance with the
Company’s normal payroll procedures in effect on the date of this Agreement
beginning with the first month following the month of Harbert’s death;
and

      (iii)           to
the extent that any continued payments or reimbursements of health care coverage
under Section 6(a)(i)(C) above are deemed to constitute taxable compensation,
any such payment due to Harbert’s wife shall be paid on or before the last day
of the calendar year following the calendar 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 Harbert’s wife to such payments or reimbursement shall not be subject to
liquidation or exchange for any other benefit.

      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.

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

      (c)           If
the Company terminates the employment of Harbert:

      (i)           for
cause pursuant to Section 8(a), then the Company shall not be obligated to
make any further payments to Harbert under this Agreement or otherwise
(including, without limitation, any accrued and unpaid bonuses and severance
benefits), except for amounts of any earned and unpaid Base Wages;

      (ii)           under
Section 8(b) above, then the Company and/or its successor (whether direct
or indirect, by purchase, merger, consolidation, by operation of law or
otherwise), shall be obligated to continue to pay Harbert the Base Wages through
the date that Harbert voluntarily leaves the employ of the Company; provided, however, that Harbert
shall not be entitled to any bonus payments; or

      (iii)           for
any reason other than for cause as set forth in Section 8(a) hereof, then
the Company and/or its successor (whether direct or indirect, by purchase,
merger, consolidation, by operation of law or otherwise), shall be obligated to
continue to pay Harbert the Base Wages for the remainder of the Advisory Period
and any bonuses he would have earned if still employed through the end of the
Advisory Period, and shall be further obligated to continue to provide and/or
pay for the existing health care coverage to Harbert for the remainder of the
Advisory Period.

      (d)           To
ensure compliance with Section 409A, the Company shall pay:

      (i)           all
amounts payable under Sections 8(c)(i) and (ii) semi-monthly in accordance with
the Company’s normal payroll procedures in effect on the date of this Agreement;
provided, however that no amount payable under Section 8(c)(i) or (ii) shall be
paid later than March 15 of the calendar year following the year in which the
amount was earned and accrued;

       

       

      
        
          
          

        

        
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            (ii)           all
amounts payable under Section 8(c)(iii):  (A) constituting Base Wages,
semi-monthly in accordance with the Company’s normal payroll procedures in
effect on the date of this Agreement beginning with the first pay period
(determined in accordance with the Company’s normal payroll procedures)
following the date of Harbert’s termination, and (B) constituting bonus
payments, on March 15 of the calendar year following the year in which each
amount is earned and accrued;
and
(iii)           to
the extent that any continued payments or reimbursements of health care coverage
under Section 8(c)(iii) above are deemed to constitute taxable compensation to
Harbert, any such payment due to Harbert shall be paid to Harbert on or before
the last day of Harbert’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
Harbert’s right to such payments or reimbursement shall not be subject to
liquidation or exchange for any other benefit.

        

        
          (e)           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), 8(d), 9, 10, 11, 12, 13, 14, 17, 18, 22, 25 and 26 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:  (a) 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; (b) of a
technical nature such as, but not limited to, methods, know-how, processes and
research; (c) pertaining to future developments such as, but not limited
to, research and development projects and future marketing, advertising or
promotion; and (d) 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.

      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.

      
        
          
          

        

        
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          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.

          21.           SECTION 409A.

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

        

        
          (b)           If
Harbert is a “specified employee” (within the meaning of Treasury Regulation
Section 1.409A-1(i)), as determined by the Company 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 those amounts to which Harbert
is entitled under this Agreement, exclusive of any amount that is permitted to
be distributed under U.S. Treasury Regulations § 1.409A-1(b)(9)(iii)
(regarding the two-times, two year exception), 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 21(b) shall be paid or distributed (without
interest) to Harbert in a lump sum on the earlier of (i) the date that is six
(6) months following termination of Harbert’s employment, (ii) a date that is no
later than thirty (30) days after the date of Harbert’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 is otherwise provided in this Agreement.

          (c)           For
purposes of Section 409A (including, without limitation, for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive
the installment payments described in Section 8(c)(iii) 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.

        

      

      (d)           Notwithstanding
anything herein to the contrary, to the extent any of the amounts payable under
Section 8(c)(iii) are treated as non-qualified deferred compensation subject to
Section 409A, then no portion of such amounts shall be payable to Employee
unless Employee’s termination of employment constitutes a “separation from
service,” as defined in Treasury Regulation Section 409A-1(h) (and any successor
provision thereto).

      (e)           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).

      (f)           As
is 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 otherwise be payable
in 2008 and may not cause an amount to be paid in 2008 that would not otherwise
be payable in 2008.

      22.           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.

       

       

       

       

      
        
          
          

        

        
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            23.           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

          24.           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.

          25.           GOVERNING LAW.  This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Ohio.

        

        
          26.           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.

          27.           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.

          28.           AMENDMENT.  This
Agreement may be amended only in a writing executed by both parties
hereto.

          29.           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.

           

           

        

      

      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:                                                                      Chief
Executive Officer

      

      Attested
to:

      

      By:/s/ Byron S.
Krantz                                                                      

      Byron S. Krantz

      Its:                                                                      Secretary

      

      

      By:/s/ Norman C.
Harbert                                                                      

      Norman C. Harbert

       

       

       

       

       

       

       

95exhbit10_28.htm

    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”).

     

    
      
        
        

      

      
        96

        
        

      

      
        
        

      

      
        

        
          	
                  (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.

     

    
      
        
        

      

      
        97

        
        

      

      
        
        

      

      
        

        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> 

    
      
        
        

      

      
        98

        
        

      

      
        
        

      

       

       

    

    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”)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    99

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