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Exhibit 10.7
March 26, 1998
Xx. Xxxx X. Xxxxxx
Aka X.X. Xxxxxx
Xxx 000, XXX Xx. 0
Xxxxx, Xxxxxxx 00000
RE:AGREEMENTS
Dear Jess:
This will confirm the agreements we have reached concerning the
continuing relationship between you and Xxxxxx, Inc.
As you know, there is an existing "Employment Agreement" between you
and Xxxxxx, Inc., a Delaware corporation (Buyer"), which was entered into at the
time of the Buyer's acquisition of Xxxxxx, Inc., an Indiana corporation (the
"Company"). That Employment Agreement was dated July 1, 1994. There is also a
"Consulting Agreement" of the same date between the same parties, pursuant to
which you were engaged as a consultant for a period of four years, commencing on
the date of termination of the Employment Agreement. There is also an agreement
signed on August 13, 1997 extending your Employment Period for one year through
June 30, 1998.
We have reached agreement on several changes. First, with respect to
the Employment Agreement, the "Employment Period" (as defined therein) will be
extended, for a period of six months, from July 1, 1998 through December 31,
1998. Your Base Salary will be adjusted to the rate of $160,000 per year
effective on the pay period beginning March 30, 1998. The Annual Bonus for this
extension will be computed in the manner described in Section 2(b) of the
Employment Agreement, except that it will be an amount equal to ten percent
(10%) of the amount by which Buyer's earnings before interest, income taxes,
depreciation, and amortization for the calendar year ending December 31, 1998
exceed $7,000,000. In addition, where the Employment Agreement describes your
position as President of Buyer and sets forth your duties in that position, and
later refers to your term as President and otherwise refers to you as President,
we have agreed that Xxxxxxx Xxxxxx will become President on March 26, 1998 and
therefore your title and duties will change and that your primary efforts will
be to assist in the transition in whatever ways may be necessary and
appropriate, including introducing the Xx. Xxxxxx to customers, orienting him to
the company, etc. You will also have continuing involvement with Buyers
acquisition and integration projects such as the
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XXXXXX, INC.
Mr. Jess. X. Xxxxxx
March 26, 1998
Page 2
current Sinterloy integration and several potential acquisitions. In addition,
we would expect to utilize your talents in whatever ways may be beneficial to
the company during the balance of the year. Upon Xx. Xxxxxx'x appointment as
President, you will become Chairman of Xxxxxx, Inc. with continuing reporting
responsibility to Hawk Corporation's Executive Vice President. Except as set
forth in this letter, each and every other term of the Employment Agreement
shall remain in full force and effect through December 31, 1998.
We have also agreed to some changes to the Consulting Agreement. First,
the "Consulting Period" (as defined therein) shall consist of a period of four
years commencing on January 1, 1999 and terminating at the close of business on
December 31, 2002. The rate of compensation shall be the same as set forth in
paragraph 4 of the Consulting Agreement, except that the first payment shall be
due with the first quarter ending March 31, 1999. Each and every other term of
the Consulting Agreement shall remain in full force and effect.
I trust that the foregoing accurately sets forth the changes to which
we have agreed. If so, please acknowledge your agreement by signing and dating
the attached copy of this letter, and then return it to me at your earliest
convenience.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
AGREED AND ACKNOWLEDGED:
/S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
March 26, 1998
