AMENDMENT TO AGREEMENTS
Exhibit 10.4
AMENDMENT TO AGREEMENTS
THIS AMENDMENT TO AGREEMENTS (this “Amendment”) is made and entered into as of this 14th day
of October, 2010, by and between HAWK CORPORATION, a Delaware corporation (“Hawk” or the
“Company”), FRICTION PRODUCTS CO., an Ohio corporation (“Friction”), and XXXXXX X. XXXXXXXX
(“Xxxxxxxx”).
RECITALS
X. Xxxx, Friction and Xxxxxxxx are parties to a certain Amended and Restated Employment
Agreement, dated as of March 31, 2009, with respect to Xxxxxxxx’x employment by Hawk and Friction
as Hawk’s Chief Executive Officer and/or Chairman of the Board for a period which terminates on
December 31, 2014 (the “Employment Agreement”).
X. Xxxx and Xxxxxxxx are parties to a certain Split-Dollar Agreement, dated as of January 23,
1998, as amended by First Amendment to Split-Dollar Agreement, dated as of December 30, 2008, with
respect to two life insurance policies with Massachusetts Mutual Life (the “Split-Dollar Agreement”
and collectively with the Employment Agreement, the “Agreements”).
X. Xxxx has entered into an Agreement and Plan of Merger, dated as of even date herewith
(“Merger Agreement”), pursuant to which Hawk will become a wholly-owned subsidiary of Carlisle
Companies Incorporated at the Effective Time (as that term is defined in the Merger Agreement) (the
“Transaction”).
X. Xxxx and Xxxxxxxx anticipate the termination of Xxxxxxxx’x employment with Hawk and
Friction post-Transaction.
E. In connection with the Transaction and immediately after the Effective Time (as that term
is defined in the Merger Agreement), Hawk, Friction and Xxxxxxxx desire to terminate Xxxxxxxx’x
employment with Hawk and Friction, the Employment Agreement and the Split-Dollar Agreement and
provide for Xxxxxxxx to receive (i) $1.6 million in a lump sum payment (the “Severance Payment”),
(ii) the use of his current administrative assistant, his current office at Hawk’s corporate
headquarters in downtown Cleveland and his current email account until June 30, 2011, (iii) the
continuation of his medical benefits for his COBRA period, and (iv) the assignment of the policies
under the Split-Dollar Agreement without any payment (including applicable taxes) by Xxxxxxxx in
exchange for the termination of the Employment Agreement.
ACCORDINGLY, in consideration of the promises hereinafter set forth in this Agreement, the
parties agree as follows:
1. One business day following the Effective Time, as that term is defined in the Merger
Agreement (the “Employment Agreement Termination Date”), Xxxxxxxx’x employment with Hawk and
Friction shall terminate and Hawk shall:
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(a) pay to Xxxxxxxx the Xxxxxxxxx Payment in immediately available funds, less any
applicable withholding taxes;
(b) cause Xxxxxxxx to have, until June 30, 2011, (i) the use of his current
administrative assistant (even if Xxxxxxxx is working from a location different from (ii)),
(ii) the use of his current office at Hawk’s corporate headquarters in downtown Cleveland,
and (iii) the access to Hawk’s email system with his current email address, each at no cost
to Xxxxxxxx;
(c) provided that Xxxxxxxx timely elects COBRA, continue to provide medical coverage at
the same level to which Xxxxxxxx is currently entitled under the existing Hawk medical plans
for the duration of Xxxxxxxx’x COBRA period and pay for Xxxxxxxx’x COBRA premiums;
(d) allow Xxxxxxxx to retain his cell phone, his cell phone number, his computer, all
personal property in his office, and the phone numbers 000-000-0000 and 000-000-0000;
(e) assign Massachusetts Mutual Life policy numbers 6251966 and 71395270 in the face
amounts of $3,800,000 and $271,397, respectively (the “Policies”) to Xxxxxxxx pursuant to
Section 10(a) of the Split-Dollar Agreement and all right, title and interest in and to the
Policies shall be transferred to Xxxxxxxx (the “Assignment”); and
(f) make the Assignment, pursuant to the Irrevocable Assignment attached hereto as
Exhibit A, based on the current cash surrender value of the Policies under Section
10(a) of the Split-Dollar Agreement, without any payment from Xxxxxxxx, net of any tax
obligations of Xxxxxxxx arising from the Assignment.
For purposes of clauses (b), (c) and (d) above, to the extent such benefits must be imputed as
taxable income to Xxxxxxxx, Xxxxxxxx is responsible for all applicable taxes. For purposes of
clauses (e) and (f) above, Hawk and Xxxxxxxx agree that the value of the Assignment as determined
by Hawk is approximately $781,000 (such amount to be finally determined on the Employment Agreement
Termination Date which final amount shall be net of any tax obligations of Xxxxxxxx arising from
the Assignment), and such value is less than the aggregate dollar amount of all of the benefits
that Xxxxxxxx has agreed to forego in connection with the termination of the Employment Agreement
and the Split-Dollar Agreement, pursuant to Section 2 of this Amendment.
2. In consideration of the payments and promises in Section 1 of this Amendment, as of the
Employment Agreement Termination Date, (a) the Employment Agreement will terminate and be of no
further effect, except for Sections 8, 9, 10, 11, 12 and 13 of the Employment Agreement (which
sections shall survive termination), and (b) the Split-Dollar Agreement will terminate and be of no
further effect.
3. This Amendment shall be of no force and effect in the event the Transaction is not
consummated and the Effective Time does not occur.
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4. Except for the payments and promises in Section 1 of this Amendment and as may be necessary
to enforce the provisions of the Employment Agreement that survive pursuant to Section 2 of this
Amendment, upon the Employment Agreement Termination Date, Xxxxxxxx hereby releases and waives any
and all claims he might have to any compensation or benefits pursuant to the Employment Agreement
or the Split-Dollar Agreement or arising out of or related to termination of the employment
relationship between Xxxxxxxx and Hawk and Friction.
5. Nothing in this Amendment shall interfere or diminish in any manner any rights to
indemnification, advancement of expenses, be held harmless, or directors’ and officers’ insurance
or any similar rights of Xxxxxxxx under Xxxx’x Second Amended and Restated Certificate of
Incorporation, Hawk’s Amended and Restated By-laws, the Merger Agreement or otherwise.
6. 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.
7. This Amendment shall inure to the benefit of and be binding upon the parties hereto, their
heirs, representatives and successors.
8. This Amendment may be executed in any number of counterparts, each of which, when executed,
shall be deemed to be an original and all of which together shall be deemed to be one and the same
instrument.
<Signature page follows>
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IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of the date first written
above.
| HAWK CORPORATION | |||||||
By:
|
/s/ Xxxxx X. Xxxxxx | /s/ Xxxxxx X. Xxxxxxxx | |||||
| Xxxxx X. Xxxxxx Secretary |
XXXXXX X. XXXXXXXX | ||||||
| FRICTION PRODUCTS CO. | |||||||
By:
|
/s/ Xxxxx X. Xxxxxx | ||||||
| Xxxxx X. Xxxxxx Secretary |
|||||||
[Signature page: Amendment to Agreements]
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EXHIBIT A
IRREVOCABLE ASSIGNMENT OF SPLIT-DOLLAR POLICIES
THIS ASSIGNMENT, dated this
day of
,
.
WITNESSETH THAT:
WHEREAS, HAWK CORPORATION (the “Company”) and Xxxxxx X. Xxxxxxxx (“Xxxxxxxx”) are parties to that
certain Split-Dollar Agreement, dated as of January 23, 1998, as amended (the “Agreement”), which
Agreement confers upon Xxxxxxxx certain rights and benefits with regard to one or more policies of
insurance insuring Xxxxxxxx’x life;
WHEREAS, Xxxxxxxx and the Company have entered into an Amendment to Agreements, dated as of October
14, 2010 (the “Amendment”) pursuant to which the Company will assign Massachusetts Mutual Life
policy numbers 6251966 and 71395270 in the face amounts of $3,800,000 and $271,397, respectively
(the “Policies”) to Xxxxxxxx pursuant to Section 10(a) of the Agreement and all right, title and
interest in and to the Policies shall be transferred to Xxxxxxxx (the “Assignment”);
NOW, THEREFORE, pursuant to the Amendment, the Company, hereby absolutely and irrevocably assigns,
gives, grants and transfers to Xxxxxxxx all of the right, title and interest in and to the
Policies, intending that, from and after this date, the Company Assignor shall neither have nor
retain any right, title or interest therein or have any further obligations under the Policies.
| HAWK CORPORATION | ||||||
| the Assignor | ||||||
| By: | ||||||
| Its: | ||||||
ACCEPTANCE OF ASSIGNMENT
Xxxxxx X. Xxxxxxxx hereby accepts the above assignment of all right, title and interest of the
Policies and assumes all obligations under the Policies.
Dated: |
||||||||
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