Exhibit 10.39
SALES PLAN
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Sales Plan, dated January 9, 2004 (the "Sales Plan"), between the
Xxxxxxx Foundation, an Ohio limited partnership ("Seller") and Northern Trust
Securities, Inc. ("Northern").
RECITALS
WHEREAS, Seller desires to establish this Sales Plan to sell
unregistered shares of Class A common stock, par value $0.01 of Hawk
Corporation, a Delaware corporation (the "Issuer"), acquired prior to the
initial public offering of the Issuer (the "Stock"); and
WHEREAS, Seller desires to sell a total of 70,000 shares of Stock (the
"Total Plan Shares"); and
WHEREAS, Seller desires to engage Northern to effect sales of shares of
Stock in accordance with the Sales Plan;
NOW, THEREFORE, Seller and Northern hereby agree as follows:
A. IMPLEMENTATION OF THE SALES PLAN
1. Subject to Paragraph A.7., Northern shall effect sales (each a
"sale") as provided herein. Beginning on January 1, 2004 and thereafter on the
first Friday of each subsequent quarter on which the American Stock Exchange
(Amex) is open and effectuating trades ("Trade Date"), a limit order for 5,000
shares of Stock (or, if less than 5,000 of the Total Plan Shares remain, such
remaining amount) at the market price per share on the Trade Date. If,
consistent with ordinary principles of best execution or for any other reason,
Northern cannot sell any or all of the 5,000 shares of Stock on the Trade Date,
then the amount of such shortfall shall be sold as soon as practicable on the
immediately succeeding days in which the Amex is open and trades regular way
following the Trade Date ("Business Day"); provided that in no event may the
amount of any shortfall be sold any later than the fourth Business Day following
the Trade Date. In the event that any shares of Stock are not sold within four
Business Days of the Trade Date, Northern will have no authority to sell any
such shortfall on the succeeding month's Trade Date.
2. Seller acknowledges and agrees that Northern will handle the above
order on a best efforts basis. In the event any limit prices of orders are away
from the prevailing market prices at any time, there can be no assurance that
such orders will be executed in whole or in part. Seller agrees that all orders
may be partially executed and will not be treated as an all or none order.
3. Seller agrees to deposit 70,000 shares of Stock into a Northern
brokerage account (the "Account"). Northern shall withdraw Stock from Seller's
Account in order to effect sales of Stock under this Sales Plan. If on any day
that sales are to be made under this Sales Plan the number of shares of Stock in
Seller's Account is less than the number of shares to be sold on such day, then
Northern shall notify Seller promptly of such deficiency, and Seller agrees to
promptly deposit into the Account the number of shares of Stock necessary to
eliminate such deficiency.
4. Subject to Paragraph A.10., Seller agrees not to remove or transfer
shares of Stock out of the Account. Upon notification pursuant to Paragraph
A.10., Seller shall have the right to remove the portion of the Total Plan
Shares subject to such Private Sale or Gift from Seller's Account.
5. To the extent that any Stock remains in Seller's Account upon
termination of this Sales Plan, Northern agrees to return such Stock promptly to
the Issuer's transfer agent for relegending to the extent that such Stock would
then be subject to transfer restrictions in the hands of Seller.
6. Northern will deduct its reasonable and customary commissions from
the proceeds of sales of Stock under this Sales Plan, together with any other
reasonable expenses incurred by Northern in connection with such sales.
7. Subject to Paragraph E.6., this Sales Plan shall become effective on
January 9, 2004 ("Effective Date") and shall terminate on the earliest of the
date on which the Total Plan Shares have been sold, the date this Sales Plan is
terminated pursuant to Paragraph E.3., or upon notification of death of Xxxxxx
X. Xxxxxxx.
8. Seller acknowledges and agrees that he does not have authority,
influence or control over any sales of Stock effected by Northern pursuant to
this Sales Plan, and will not attempt to exercise any authority, influence or
control over such sales. Northern agrees not to seek advice from Seller with
respect to the manner in which it effects sales under this Sales Plan. Seller
understands that Northern shall have no discretion as to the timing of the sales
of Stock.
9. Northern will notify Seller and Issuer of all transactions pursuant
to customary trade confirmations that are provided in the normal course of
business.
10. Seller agrees that he will notify Northern as soon as possible in
the event he consummates a private sale of any portion of the Total Plan Shares
to the Issuer (a "Private Sale") or makes a bona fide gift of any portion of the
Total Plan Shares (a "Gift"). Seller agrees that in the event that any sale of a
portion of the Total Plan Shares by Northern pursuant to this Sales Plan, when
combined with a Private Sale or a Gift, results in the sale of Stock in excess
of the Total Plan Shares, Seller shall be responsible for delivering additional
Stock to Northern to cover the excess number of shares sold.
11. Seller understands that Northern may not be able to effect a sale
due to a market disruption or a legal, regulatory or contractual restriction
applicable to Northern, an insufficient number of shares of Stock being in the
Account or a pending sale under this Sales Plan causing Seller to exceed any
applicable volume limitations of Rule 144 or 145 under the Securities Act of
1933 (the "Securities Act"). If any sale cannot be executed as required by
Paragraph A.1. due to a market disruption, a legal, regulatory or contractual
restriction applicable to Northern or any other such event, Northern shall
effect such sale as promptly as practical after the cessation or
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termination of such market disruption, applicable restriction or other event,
or, at the discretion of Northern, the Sales Plan may be terminated.
12. It is the intent of the parties that this Sales Plan comply with
the requirements of Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of
1934 (the "Exchange Act") and this Sales Plan shall be interpreted to comply
with the requirements of Rule 10b5-1(c).
B. RULES 144 AND 145
The following three paragraphs shall only apply to the extent Seller is
subject to Rules 144 and 145.
1. Northern agrees to conduct all sales in accordance with the manner
of sale requirement of Rule 144 or 145 under the Securities Act, and in no event
shall Northern effect any such sale if such sale would exceed the then
applicable volume limitation under Rule 144, assuming Northern's sales under
this Sales Plan and those notified to Northern pursuant to Paragraph B.3. are
the only sales subject to that limitation. Seller will be responsible for
completing and filing all required Form 144s prior to the sale of any Stock
covered under Rule 144. Seller agrees to promptly provide Northern with a copy
of any Form 144 filing made by Seller. In the event Seller requests, and
Northern agrees, in writing, to make certain Form 144 filings, Seller hereby
appoints Northern as agent and attorney-in-fact to execute, file and submit, on
behalf of Seller, any such required Form 144s.
2. Each such Form 144 shall state in the "Remarks" section that the
sales thereunder are being made pursuant to a previously adopted plan intended
to comply with Rule 10b5-1(c), shall include the date Seller adopted this Sales
Plan and shall indicate that the representation regarding Seller's knowledge of
material information speaks as of the adoption date of this Sales Plan.
3. Seller agrees not to take any action that would cause the sales not
to comply with Rule 144 or 145, and Seller agrees not to cause any person or
entity with which Seller would be required to aggregate sales of Stock pursuant
to paragraph (a)(2) or (e) of Rule 144 to take any action that would cause the
sales not to comply with Rules 144 or 145. Seller will provide notice of any
such transactions during the three months preceding the date hereof and may not
enter into any other selling program or transaction without the prior consent of
Northern.
C. REPRESENTATIONS AND AGREEMENTS OF SELLER
1. Seller represents and warrants that as of the time of execution of
this Sales Plan, Seller: (a) is not aware of material, nonpublic information
with respect to the Issuer or any securities of the Issuer (including the Stock)
and, (b) is entering into this Sales Plan in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act
or other applicable securities laws.
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2. At the time of Seller's execution of this Sales Plan, Seller has not
entered into or altered a corresponding or hedging transaction with respect to
the Stock. Seller agrees not to enter into any such transaction while this Sales
Plan remains in effect.
3. Seller agrees to make all filings, if any, required under and
monitor his compliance with Sections 13(d), 13(g) and 16 of the Exchange Act.
4. Except as provided in Paragraph B.1., Seller acknowledges and agrees
that Northern has no duty to determine whether Sellers have violated Rules 144
or 145 under the Securities Act, or Sections 13(d), 13(g) or 16 of the Exchange
Act or the rules adopted by the SEC thereunder. Seller understands that this
Plan in no way alters his obligations and responsibilities under Section 16,
including those prohibitions against short swing profits.
5. Seller understands that there may be specific state law restrictions
or limitations applicable to this Sales Plan. Seller acknowledges and agrees
that Northern has not provided Seller with any tax, accounting or legal advice.
Seller understands that he should seek the advice of counsel regarding this
Sales Plan and the various securities and tax law issues related thereto.
6. Seller agrees to notify Northern immediately in the event of trading
restrictions being imposed as the result of any lock up event restricting sales
by affiliates, such as a stock offering, tender offer or acquisition transaction
or any similar event.
7. Seller represents and warrants that he is able to sell shares of
Stock, as contemplated by this Sales Plan, in accordance with the Issuer's
statement regarding xxxxxxx xxxxxxx and confidentiality, as supplemented and
amended from time to time and Seller has obtained the acknowledgement of the
Issuer to enter into this Sales Plan. Seller further represents and warrants
that the Stock is not subject to any liens, security interests or other
impediments to transfer (except for limitations imposed by Rules 144 or 145, if
applicable).
D. INDEMNIFICATION AND LIMITATION ON LIABILITY
1. Seller agrees to indemnify and hold harmless Northern and its
directors, officers, employees and affiliates from and against all claims,
losses, damages and liabilities (including without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) arising out of or attributable to Northern's actions
taken or not taken in compliance with this Sales Plan or arising out of or
attributable to any breach by Seller of this Sales Plan (including Seller's
representations and warranties hereunder) or any violation by Seller of
applicable laws or regulations. Seller will not be liable under the foregoing
sentence to the extent that any claim, loss, damage or liability is found in a
final judgement by a court to have resulted from the bad faith, gross negligence
or willful misconduct of Northern or its directors, officers, employees or
affiliates. This indemnification shall survive termination of this Sales Plan.
2. Notwithstanding any other provision hereof, Northern shall not be
liable to Seller for: (a) special, indirect, punitive, exemplary or
consequential damages, or incidental losses or damages of any kind, even if
advised of the possibility of such losses or damages or if such
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losses or damages could have been reasonably foreseen; or (b) any failure to
perform or to cease performance or any delay in performance that results from a
cause or circumstance that is beyond its reasonable control, including but not
limited to failure of electronic or mechanical equipment, strikes, failure of
common carrier or utility systems, severe weather, market disruptions or other
causes commonly known as "acts of God".
E. GENERAL
1. This Sales Plan shall be governed by and construed in accordance
with the laws of the State of Delaware without reference to choice of law
principles and may be modified or amended only by a writing signed by the
parties hereto and acknowledged by the Issuer.
2. This Sales Plan shall be subject to all terms and conditions
governing Seller's Account, including the Northern Account Agreement.
3. Notwithstanding anything to the contrary herein, Seller and/or
Issuer may notify Northern to terminate this Sales Plan at any time. Seller may
also notify Northern to modify sales under this Sales Plan; provided, however,
that such modification shall not be effective until 30 days after the
notification thereof and the acknowledgement of Issuer. Any such modification or
termination shall be made in good faith and not as a part of a plan or scheme to
evade the prohibitions of Rule l0b5-1 or other applicable securities laws.
Seller agrees that he will not modify this Sales Plan at any time that he is
aware of any material non-public information about the Issuer and/or the Stock.
4. All notices to Northern under this Sales Plan shall be given to
Northern's office by facsimile at (000) 000-0000 or by certified mail at
Northern Trust Securities, Inc., 00 X. XxXxxxx Xxxxxx, X-00, Xxxxxxx, Xxxxxxxx
00000. Attention: Xxxxxx Xxxxxx. Upon termination or suspension of this Sales
Plan, Northern will send notice to Seller and Issuer to the address provided
below.
5. Seller's rights and obligations under this Sales Plan may not be
assigned or delegated without the written permission of Northern.
6. This Sales Plan shall not be effective until executed by Seller and
Northern, and acknowledged by Issuer. This Sales Plan may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.
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The Xxxxxxx Foundation
By:/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Trustee
Northern Trust Securities, Inc.
By:/s/ Northern Trust Securities, Inc.
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Solely for purposes of acknowledging notification of the foregoing Sales Plan
and not as a party thereto, except to the extent of its rights thereunder, Hawk
Corporation, through its representative, has duly signed below:
Hawk Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Vice President - Finance
Address: 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
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