AGREEMENT, RELEASE AND WAIVER
EXHIBIT
10.1
THIS
AGREEMENT, RELEASE AND WAIVER (“Agreement”)
is
entered into on the 23rd day of January, 2007, by and between XXXXXX
X.
XXXXXXXX, a resident of the State of Ohio (“Employee”),
and
HAWK CORPORATION, a Delaware corporation (“Hawk”).
WHEREAS,
Employee has been an employee of Hawk Precision Components Group, Inc., an
Ohio
Corporation (“HPCG”),
pursuant to the terms of an Agreement of Employment, Confidentiality and
Non-Competition dated as of August 14, 2006, as modified by letter
agreements dated as of November 3, 2006 and December 20, 2006
(together, the “HPCG
Agreement”);
WHEREAS,
HPCG is a subsidiary of Hawk;
WHEREAS,
Employee is a Senior Vice President of Hawk;
WHEREAS,
previously, Employee was employed by Friction Products Co., an Ohio corporation
(“Friction”)
that
is also an indirect subsidiary of Hawk, pursuant to the terms of an Agreement
of
Employment, Confidentiality and Non-Competition dated as of January 27,
2000, as amended by a First Amendment to Agreement of Employment,
Confidentiality and Non-Competition dated as of October 5, 2004 (together,
the “Friction
Agreement”);
WHEREAS,
pursuant to the Friction Agreement, Employee also served as the President
of Tex
Racing Enterprises, Inc., a Delaware corporation that is also a subsidiary
of
Hawk;
WHEREAS,
Employee and Hawk are parties to a Change in Control Agreement dated as of
August 14, 2006 (the “CIC
Agreement”)
pursuant to which Employee is entitled to receive certain benefits upon a
change
in control of Hawk provided that Employee is then in the employ of Hawk or
any
of its subsidiaries;
WHEREAS,
Employee and Hawk are parties to Incentive Stock Option Agreements dated
as of
February 1, 2000, October 5, 2001, January 30, 2004 and
August 20, 2004 and to a Non-Statutory Stock Option Agreement dated as of
August 20, 2004 (collectively, the “Stock
Options”
and,
together with the HPCG Agreement, the Friction Agreement, the CIC Agreement
and
any other agreements (other than this Agreement and the PCGH Employment
Agreement, as defined below) between Employee, on the one hand, and Hawk
and/or
any other subsidiary or affiliate of Hawk, on the other hand, the “Contracts”);
WHEREAS,
on December 21, 2006, Employee entered into an employment agreement with
PCG Holdings Group Inc., a Delaware corporation (“PCGH”)
(the
“PCGH
Employment Agreement”),
that
will not become effective unless and until the transactions contemplated
by that
certain Stock Purchase Agreement (the “Purchase
Agreement”)
by and
between Hawk and PCGH dated as of December 21, 2006 (the “Contemplated
Transactions”)
are
consummated;
WHEREAS,
in conjunction with the negotiation of the Purchase Agreement and the PCGH
Employment Agreement and the continued employment of Employee with HPCG through
the closing date of the Contemplated Transactions (the “Closing
Date”),
Hawk
induced and PCGH agreed to provide additional value to Employee under the
PCGH
Employment Agreement;
WHEREAS,
one of the conditions to the obligation of Hawk to consummate the Contemplated
Transactions is that Employee have executed and delivered this Agreement
at
least eight (8) days prior to the Closing Date of the Contemplated
Transactions, and that Employee not have revoked, rescinded or repudiated
this
Agreement (the “Closing
Condition”);
and
WHEREAS,
Employee and Hawk now desire to (i) resolve all matters arising out of or
related to Employee’s employment with and/or association with Hawk and each of
its other subsidiaries or affiliates, and the Contracts, and (ii) enable
Employee to enjoy the benefits of employment with PCGH, under the PCGH
Employment Agreement or otherwise, by satisfying the Closing Condition and
consummating the Contemplated Transactions;
NOW,
THEREFORE, in consideration of the foregoing recitals, of the covenants and
agreements set forth herein and of other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties agree
as
follows:
1. Hawk’s
Actions.
From
the Date of this Agreement through the closing of the Contemplated Transactions
(the “Closing”),
Hawk
shall cause Hawk MIM, Inc., an Ohio corporation that is an indirect wholly-owned
subsidiary of Hawk, to continue to pay Employee his current base salary and
provide Employee his current benefits.
2. Release
and Waiver.
Except
as otherwise specifically provided in this Agreement, with respect to any
and
all events occurring on or before the date of this Agreement arising out
of or
related to Employee’s employment, association and/or relationship with Hawk and
any other subsidiary or affiliate of Hawk, or with respect to any of the
Contracts:
(a) Employee
hereby releases and forever discharges Hawk, and each of its subsidiaries,
affiliates, related companies, predecessors, successors, current and former
agents, partners, officers, directors, shareholders, insurers, attorneys,
employees, representatives and assigns (each, a “Released
Party”
and,
collectively, the “Released
Parties”),
from
any and all claims, demands and causes of action, known and unknown; this
includes, among other things, claims based on the legal theories of wrongful
or
unjust termination, breach of contract (express or implied), promissory
estoppel, negligent or intentional (tortious) conduct, negligent or intentional
infliction of emotional distress, defamation, breach of any implied covenant
of
good faith and fair dealing, violation of public policy, claims for failure
to
pay a bonus, claims for failure to pay a success bonus based on the Contemplated
Transactions or any other transaction(s) related to any Released Party, claims
for failure to pay severance, claims under any of the Contracts, claims under
the Hawk 1997 Stock Option Plan, claims under the Hawk 2000 Long Term Incentive
Plan, claims under any other stock, incentive, bonus, compensation, severance,
insurance, welfare, benefit or other plan of Hawk or any other Released Party,
and any and all forms of employment discrimination, and including claims
for
attorneys’ fees, expenses and costs related to any of the foregoing;
provided,
however,
that
the foregoing release shall not affect (i) any of Employee’s rights under the
PCGH Employment Agreement or (ii) any of the rights set forth in paragraph
4 of
this Agreement and the Stock Options related thereto; and
(b) Employee
hereby releases and forever discharges each of the Released Parties from
any and
all claims, demands and causes of action, and waives any rights he may have,
under Title VII of the Civil Rights Act of 0000, xxxxx 00 X.X.X. §0000,
under the Age Discrimination in Employment Act (“ADEA”),
under
the Americans With Disabilities Act, under the Family and Medical Leave Act
of
1993, under the Civil Rights Attorney’s Fees Awards Act of 1976, under the Ohio
Fair Employment Practices Act, or under any other federal, state or local
statute prohibiting discrimination in employment, or to request that a lawsuit
be instituted pursuant to 29 U.S.C. §206(d); and
(c) Employee
agrees not to institute a lawsuit with respect to any matters released or
any
rights waived in this Agreement. It is understood and agreed that nothing
contained in this Agreement is intended to affect Employee’s right to file an
administrative charge with the Equal Employment Opportunity Commission (EEOC),
subject to the restriction that if any such charge is filed Employee agrees
not
to seek or in any way obtain or accept any monetary award, recovery, settlement
or relief therefrom. Nothing in this Agreement shall prevent Employee from
filing a legal action to challenge whether his agreement to the terms of
this
Agreement was knowing and voluntary for purposes of the ADEA, or to pursue
any
claims that by law he cannot waive. Employee further agrees that should any
class or collective action lawsuit in which he may be a participant be brought
against any Released Party, he will opt-out (or refrain from opting in) to
the
class or collective action.
3. Change
in Control Agreement.
Employee acknowledges that a Change in Control (as defined in the CIC Agreement)
under the CIC Agreement shall not be deemed to have occurred by virtue of
the
execution of the Purchase Agreement or the consummation of any or all of
the
Contemplated Transactions, and that he shall not at any time be deemed to
have
suffered a Qualifying Termination (as defined in the CIC Agreement) under
the
CIC Agreement. Notwithstanding the foregoing, Employee acknowledges that
Exhibit B to the CIC Agreement, titled Restricted Covenants (“Exhibit
B”),is
incorporated herein by reference, and shall remain in full force and effect
in
accordance with its terms; provided,
however,
that
Section 3 of Exhibit B shall not apply to Employee while he remains
employed by HPCG or any of its direct or indirect subsidiaries.
4. Stock
Options.
Employee’s stock options that are vested as of the Closing will remain
exercisable subject to the terms of the Stock Options. Any of Employee’s stock
options that are unvested as of the Closing will be forfeited pursuant to
the
terms of the Stock Options. Employee acknowledges and agrees that the Purchase
Agreement and the closing of the Contemplated Transactions shall not accelerate
the vesting of any stock options.
5. No
Future Employment.
Employee covenants and agrees that (i) following the Closing, he will not
apply for employment with any of the Released Parties other than HPCG or
its
subsidiaries, and (ii) in the event that he does in fact apply for any such
employment in violation of the terms of clause (i) above, none of such
Released Parties shall have any obligation to consider him for such
employment.
6. Cooperation.
Employee agrees to fully cooperate, in good faith and to the best of his
ability, with reasonable requests of Hawk and/or any of the Released Parties
in
connection with all pending, threatened or future claims, actions, litigations,
arbitrations or inquiries by any state, federal, foreign or private person
or
entity, directly or indirectly arising from or relating to any transaction,
event or activity he was involved in, participated in or had knowledge of
in the
course of his involvement with Hawk or such Released Party. Such cooperation
will be at mutually-agreeable times and Hawk or such Released Party, as the
case
may be, shall reimburse Employee for his out-of-pocket expenses reasonably
incurred in providing such cooperation.
7. Terms
of Offer; Revocation.
(a) This
Agreement has been delivered to Employee, by email, on the 4th day of January,
2007. The offer contained herein shall remain open until the end of the
twenty-first (21st) full day after delivery. The parties hereby agree that
any changes to the terms of this Agreement which they agree to make during
the
period from the date of delivery just described through the date of execution
of
this Agreement, whether material or immaterial, do not restart the running
of
the time period set forth in the preceding sentence.
(b) After
execution of this Agreement, Employee may revoke his agreement hereto by
delivering written notice of revocation to Hawk and to Hawk (to the attention
of
Xxxxxx X. Xxxxxxxxxx, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000)
at any time during the period from the date of Employee’s execution through the
end of the seventh (7th) full day after such execution (the “Revocation
Period”).
This
Agreement shall not be effective, and no actions shall be taken under this
Agreement, until the expiration of the Revocation Period. Upon expiration
of the
Revocation Period following Employee’s execution of the Agreement, this
Agreement shall be fully effective and enforceable.
8. No
Liability.
Nothing
contained in this Agreement is intended to constitute an admission by Hawk
or
any other Released Party of liability of any nature whatsoever to Employee,
and
Hawk expressly denies any such liability.
9. Governing
Law; Jurisdiction.
This
Agreement shall be governed by and shall be interpreted in accordance with
the
laws of the State of Ohio, and the parties hereby 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, or the breach hereof.
10. Costs
of Action.
In the
event that any party to this Agreement or any Released Party brings any action
or proceeding in connection with this Agreement, the prevailing party in
such
action shall be entitled to recover, as part of such action or proceeding,
its
costs therein including reasonable attorneys’ fees.
11. Headings.
The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
12. Severability.
It is
the intention of the parties that the terms and provisions of this Agreement
be
construed to be separable and severable. If any term or provision of this
Agreement shall be held void, invalid, unenforceable or in conflict with
any
applicable law, all of the other terms and provisions of this Agreement shall
remain valid and fully enforceable.
13. Assignment;
Benefit and Burden.
This
Agreement is not assignable by Employee. This Agreement shall bind and inure
to
the benefit of the parties hereto and their respective present, former and
future heirs, beneficiaries, estates, spouses, personal representatives,
affiliates, successors and permitted assigns, and is specifically entered
into
for the benefit of and may be enforced by any of the Released
Parties.
14. Amendment.
This
Agreement may not be changed orally, but may be amended, superseded, cancelled,
renewed or extended, and the terms hereof may be waived, only by an instrument
in writing signed by each of the parties, or, in the case of a waiver, signed
by
the party against whom enforcement of such waiver is being sought.
15. Entire
Agreement.
This
Agreement embodies the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect thereof; provided,
however,
that
the obligations of Employee under sections 4 through 15 of the HPCG
Agreement shall remain in full force and effect in accordance with their
respective terms.
16. Acknowledgements.
Employee acknowledges that he has carefully read all of the terms of this
Agreement; that such terms have been fully explained to him and that he
understands the consequences of each and every term; that he has had adequate
time to consult with, and has consulted with, his own legal advisor prior
to
signing this Agreement; and that he specifically understands that by signing
this Agreement he is giving up any and all rights he may have against Hawk
and
any Released Party under the laws and legal theories referred to above with
respect to events occurring on or before the date of this
Agreement.
17. Counterparts.
This
Agreement may be executed in any number of counterparts, including by facsimile
or electronic signature included in an Adobe PDF file, each of which shall
be
deemed to be an original, but all of which together shall constitute one
and the
same instrument. This Agreement shall become effective when counterparts
have
been signed by each party and delivered to the other parties, it being
understood that the parties need not sign the same counterpart.
[This
space intentionally left blank]
IN
WITNESS WHEREOF, this Agreement, Release and Waiver has been duly executed
and
delivered at Cleveland, Ohio on the date first set forth above.
| |
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| By: | /s/ Xxxxxx X. Xxxxxxxx | |
|
XXXXXX X. XXXXXXXX |
||
| HAWK CORPORATION | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |
|
Xxxxxx X. Xxxxxxxxxx |
||
| Vice President - CFO | ||
