Exhibit 10.9
CONSULTANT AGREEMENT
This CONSULTANT AGREEMENT (this "Agreement"), effective as of December
31, 2001, is made and entered into as of this 31st day of December, 2001, by and
among HAWK CORPORATION, a Delaware corporation ("Hawk"), Friction Products Co.,
an Ohio corporation (together with Hawk, the "Company") and XXXXXX X. XXXXXXX
(the "Consultant").
RECITALS
A. Consultant is Senior Chairman of the Board of Directors of the
Company;
B. Consultant and the Company are parties to an amended and restated
employment agreement dated as of the date hereof (the "Employment Agreement");
C. The Company wants to ensure that Consultant will continue to provide
consultant services to the Company after the expiration of the employment period
provided for in the Employment Agreement;
D. Throughout and following the period that the Consultant serves as a
consultant to the Company, the Company wants Consultant to continue to protect
Confidential Information (as defined in the Employment Agreement) and not to use
his knowledge and experience during the Restricted Period (as hereinafter
defined) to assist a competitor of the Company's business; and
E. The Company and Consultant desire to make provision for the payments
and benefits that Consultant will be entitled to receive from the Company in
consideration for Consultant's obligations and actions under 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 Executive agree as follows:
1. CONSULTING SERVICES. The Company hereby retains the Consultant to
provide consulting services as may be requested by the Company, which services
shall include by way of illustration, but not by way of limitation, (a)
operation, production and management advice regarding, and assistance for, all
of the Company or its affiliates' manufacturing facilities, (b) advice and
participation in the negotiations with respect to acquisitions or divestitures
that the Company or its affiliates may from time to time consider, (c) advice
and participation in the negotiation of contracts, agreements, joint ventures
and other commitments which may have a material effect on the business,
financial condition and affairs, properties, assets, obligations, and operation
of the Company; (d) advice regarding the formulation of the annual budget and
business plan of the Company; (e) advice regarding the issuance by the Company
of any equity securities and (f) advice regarding the refinancing of any of the
Company's debt obligations or the incurrence of any additional debt by the
Company.
2. TERM OF AGREEMENT. This Agreement will begin on the earlier of June
30, 2007 or the termination of the Employment Agreement pursuant to Section 8(b)
thereof and terminate on June 30, 2012; provided that if the term of this
Agreement commences at any time prior to June 30, 2005, this Agreement shall
terminate on the day that is five years after the commencement date, unless
terminated sooner in accordance with the provisions of this Agreement.
3. COMPENSATION. The Consultant shall retain the office he is presently
housed in or its equivalent and Consultant shall be compensated for all work and
services performed under this Agreement, and reimbursed for all reasonable and
necessary expenses incurred in the performance of this Agreement, as follows:
(a) Consultant will be paid (i) sixty percent (60%) of Consultant's
average annual Base Wages (as such term is defined in the Employment Agreement)
(exclusive of any reduction for
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Defined Benefit Payments as such term is defined in the Employment Agreement)
for the previous three consecutive years of employment with the Company
immediately preceding the commencement date of this Agreement, less applicable
withholding taxes, payable not less frequently than semi-monthly ("Consultant
Payments") and (ii) annual bonus payments equal to sixty percent (60%) of the
Consultant's average annual bonus payment for the previous three consecutive
years of employment with the Company immediately preceding the commencement date
of this Agreement (as such bonus is determined in accordance with Section 2(c)
of the Employment Agreement), less applicable withholding taxes ("Bonus
Continuation Payments"); provided that the Consultant Payments and Bonus
Continuation Payments shall be reduced by the amount of any payments made to the
Consultant or his spouse under any non-contributory defined benefit plan
maintained by the Company; and
(b) The Company will reimburse the Consultant for all reasonable and
necessary expenses actually incurred by Consultant for travel, telephone calls,
and other related expenses in the performance of this Agreement upon
presentation of acceptable documentation for expenses in excess of $25.
4. PERFORMANCE STANDARD. The Consultant shall perform all consulting
services provided hereunder to the satisfaction of the Company as reasonably
requested by Company. Consultant's contact at the Company shall be Xxxxxx X.
Xxxxxxxx, Chief Executive Officer of the Company, or his successor or
successors, at the address set out in Paragraph 13, Notices.
5. PERFORMANCE SCHEDULE. The Consultant shall be free at all times to
arrange the time and manner of performance of the consulting services and will
not be expected to maintain a schedule of duties or assignments except as needed
to meet deadlines or schedules established by
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the Company. The Consultant will work as he may so independently decide. The
Company shall specify milestones, meeting and conference schedules, and due date
for deliverables.
6. DELEGATION AND ASSIGNMENT. The Consultant recognizes that the
Company's primary reason for entering into this Agreement is to benefit from his
personal services and that he is central to the performance of this Agreement.
The Consultant recognizes the important responsibility this places on him and
will seek to ensure that those services are provided in complete fulfillment of
this Agreement. The Consultant may not assign, subcontract or delegate the
performance of the consulting services or other duties under this Agreement
without the prior written consent of the Company, which consent may be withheld
in the Company's sole and absolute discretion.
7. AVAILABILITY. The Consultant will be available on reasonable notice
at all times and will provide up-to-date information regarding his address,
telephone number, and other means of contacting him.
8. INDEPENDENT CONTRACTOR. Both the Company and the Consultant agree
that the Consultant will act as an independent contractor with respect to the
Company in the performance of the Consulting Services and all other duties under
this Agreement. Accordingly, except as otherwise provided, the Consultant
acknowledges that he will not be eligible for any benefits provided by the
Company to its employees. Except as otherwise provided, the Consultant shall be
solely responsible for arranging withholding and payment of all taxes arising
out of the Consultant's activities in accordance with this Agreement, including
without limitation, federal and state income taxes, social security taxes,
unemployment insurance taxes, and any other taxes or business license fees
related to the Consultant's business. Moreover, the Consultant agrees to obtain
all necessary insurance coverage, including, without limitation, liability,
worker's compensation and state
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disability insurance. The Consultant shall not represent directly or indirectly
that he is an agent or legal representative of the Company, nor shall the
Consultant incur any liabilities or obligations of any kind in the name of or on
behalf of the Company except as specifically authorized in writing by the
Company. The Consultant shall comply with all applicable federal, state, and
local laws, ordinances and regulations.
9. NON-COMPETITION AND CONFIDENTIAL INFORMATION. The provisions of
Sections 9, 10, 11, 12, 13 and 18 of the Employment Agreement shall continue to
apply during the term of this Agreement; provided that the Restricted Period (as
defined in the Employment Agreement) shall expire two years after the date of
the termination of this Agreement.
10. CONFLICTS OF INTEREST. The Consultant agrees to refrain from
accepting or conducting assignments from any person, firm or company during the
term of this Agreement which would conflict with or impair any of this
Agreement. The Consultant agrees promptly to disclose to the Company any
business relationship or other matter that may raise a question concerning a
conflict of interest. Should any such conflict arise, in the reasonable
determination of the Company, this Agreement may be terminated by the Company
without notice or further obligation, except that the Consultant shall be paid,
in accordance with this Agreement; provided that prior to any such termination
the Company must notify Consultant in writing of the conflict and provide
Consultant with thirty (30) days to cure such conflict.
11. DEFAULT. If either party fails to perform any material obligation
under this Agreement or violates any material term or condition of this
Agreement, and such failure or violation is not cured within ten (10) days
following receipt of a default notice from the other party, then the other party
shall have the right to terminate this Agreement upon written notice to the
defaulting party.
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12. TERMINATION.
(a) Without limiting the provisions of paragraphs 10 and 11, above,
either party may terminate this Agreement at any time by delivering to the other
party at least thirty (30) calendar days prior written notice of termination. In
the case of termination by the Company pursuant to this paragraph or paragraphs
10 or 11, the Company shall pay the Consultant the Consultant Payments and Bonus
Continuation Payments remaining for the duration of the Agreement and any
expenses incurred by Consultant prior to the termination. The Consultant
Payments and Bonus Continuation Payments shall continue to be made in accordance
with the prior payments made to Employee hereunder or under the Employment
Agreement. Notwithstanding the foregoing, termination shall not affect the
Amended and Restated Wage Continuation Agreement of even date ("WCA"). The WCA
shall remain in full force and effect until June 30, 2012, unless otherwise
terminated by the terms of said WCA.
(b) In addition, this Agreement shall terminate, and the Corporation
shall have no further obligation hereunder in the event that:
(i) The Consultant voluntarily terminates this Agreement or
dies;
(ii) The Consultant becomes mentally or physically disabled as
such term is defined in the Employment Agreement; or
(iii) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) becomes, by
tender or exchange offer or otherwise, a beneficial owner,
directly or indirectly, of stock of the Corporation
representing fifty percent (50%) or more of the voting
power of the Corporation's then outstanding stock,
exclusive of the Series D Preferred
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Stock as a result of a transaction approved by vote
of the Corporation's Board of Directors prior to such
transaction.
13. ASSIGNMENT. This Agreement is a personal services contract and it
is expressly agreed that the rights and interests of Consultant hereunder may
not be sold, transferred, assigned, pledged or hypothecated.
14. 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.
15. 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.
16. 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
000 Xxxxxx Xxxxxx, Xxxxx 00-0000
Xxxxxxxxx, Xxxx 00000-0000
Copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
One Cleveland Center
0000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Consultant: Xxxxxx X. Xxxxxxx
X.X. Xxx 000
Xxxxx, XX 00000
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17. 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.
18. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Ohio.
19. SUBMISSION TO JURISDICTION. The Company may enforce any claim
arising out of or relating to this Agreement, or arising from or related to the
employment 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, Consultant 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 Consultant 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.
Consultant 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.
20. 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.
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21. AMENDMENT. This Agreement may be amended only in a writing executed
by both parties hereto.
22. ENTIRE AGREEMENT. This Agreement constitutes 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. 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.
"COMPANY" "CONSULTANT"
Hawk Corporation and Friction Products Co.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
Its: Chief Executive Officer
Attested to:
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Its: Secretary
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