AMENDED AND RESTATED SENIOR ADVISOR AGREEMENT

THIS AMENDED AND RESTATED SENIOR ADVISOR AGREEMENT (this “Agreement”) is made and entered into the 30 ^th day of December, 2008, by and among HAWK CORPORATION, a Delaware corporation (“Hawk” or the “Company”) and NORMAN C. HARBERT (“Harbert”).

RECITALS

A.           The Company and Harbert are parties to the Senior Advisor Agreement dated as of June 1, 2005 (the “Senior Advisor Agreement”).

B.           In order to ensure compliance with Section 409A (as defined below), the parties desire to amend and restate the Senior Advisor Agreement in its entirety as set forth in 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 Harbert amend and restate the Senior Advisor Agreement, as follows:

1.             EMPLOYMENT.   The Company hereby employs Harbert as a senior advisor and Harbert agrees to be employed by the Company as a senior advisor for a period commencing as of the date hereof and terminating on June 30, 2012.  Such period, together with the period of any extension or renewal upon the mutual agreement of the Company and Harbert, of such employment is herein referred to as the “Advisory Period.”

2.             COMPENSATION AND BENEFITS.   Provided that Harbert’s employment hereunder is not terminated in accordance with this Agreement, during the Advisory Period Harbert shall receive as compensation:

(a)            Salary:   Salary at the annual rate of $418,625, payable not less frequently than semi-monthly in accordance with the Company’s normal payroll procedures (as adjusted from time to time, the “Base Wages”), reduced by any payments made to Harbert under (i) any non-contributory defined benefit plan maintained by the Company (“Defined Benefit Payments”) and (ii) any disability or similar policy.  To ensure compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Department of Treasury regulations and other interpretive guidance issued thereunder, each as in effect from time to time (collectively, “Section 409A”), in no event shall any portion of the Base Wages be paid later than March 15 of the calendar year following the calendar year in which the Base Wages were earned and accrued.

(b)            Harbert Benefit Programs:   Harbert shall have the right to participate, subject to any applicable eligibility requirements, in all corporate employee benefit programs offered to “executive” employees by the Company and any other plans made available by the Company in the future to its executives and “key” management employees, including, if any, the Company’s 401(k) plan, health and life insurance programs and non-contributory defined benefit plans.

(c)            Executive Bonus Plan:   During each year of the Advisory Period, Harbert shall receive a bonus pursuant to the Annual Incentive Compensation Plan presently in effect in an amount $100,000 less than the bonus payable to Ronald E. Weinberg (“Weinberg”) but not to exceed $250,000.  To ensure compliance with Section 409A, any bonus payment payable under this Section 2(c) shall be paid no later than March 15 of the calendar year following the calendar year in which the amount was earned and accrued.

(d)            Business Expenses:   The Company shall promptly reimburse Harbert for all reasonable and necessary business expenses incurred by Harbert on behalf of the Company and its parent, wholly-owned subsidiaries or affiliated entities during the Advisory Period.  Harbert shall submit to the Company appropriate expense reports that detail such expenses and includes copies of receipts where appropriate.  To ensure compliance with Section 409A, reimbursed business expenses payable under this Section 2(d) for each calendar year shall be paid no later than March 15 of the calendar year following the calendar year in which those expenses were incurred by Employee.

(e)            Office:   Harbert shall retain the office he is presently housed in or its equivalent.

(f)            Automobile Expenses:   Harbert shall be entitled to receive a car allowance in the amount determined by the Company’s Compensation Committee (regardless of its membership), but not less than the amount presently paid, payable semi-monthly.  The Company shall provide property and liability insurance on Harbert’s automobile and reimburse Harbert for the reasonable maintenance and repair costs incurred with respect to Harbert’s automobile.  To ensure compliance with Section 409A, (i) car allowance amounts shall be paid no later than March 15 of the calendar year following the calendar year in which Employee’s right to each amount accrued and (ii) reimbursed maintenance and repair costs shall be paid no later than March 15 of the calendar year following the calendar year in which those expenses were incurred by Employee.

(g)             Insurance:   For the Advisory Period and any renewal thereof, the Company shall continue to maintain and pay the premiums on the insurance policies issued by Massachusetts Mutual Life (Policy Numbers 71396950 and 6160812), or such other similar policies as may be agreed by Harbert.  Such insurance policies shall continue to be subject to the applicable split-dollar agreements between the Company and Harbert.

3.             ADJUSTMENTS TO COMPENSATION.   Harbert hereby authorizes the Company to withhold and withdraw from amounts payable to Harbert under this Agreement all applicable amounts required by federal, state and local laws.

4.             DUTIES.   Harbert shall, during the Advisory Period, serve as the Chairman Emeritus of the Board and senior advisor of the Company or in any capacity as the Board of Directors (the “Board”) may request and Harbert shall mutually agree to serve from time to time and in such capacity.  Harbert's title shall be Chairman Emeritus of the Board and Founder.  During the Advisory Period, Harbert shall perform such duties and responsibilities as are customarily assigned to the Chairman Emeritus and Founder and senior advisor of the Company and shall chair the Company's annual stockholder meeting.  Harbert shall be required to devote the time and efforts to the business and affairs of the Company as is necessary to discharge his duties and Harbert may (i) serve on the boards of directors of other companies and on the boards of trustees of charitable organizations, and (ii) devote a portion of his time and efforts to the making and management of personal investments, in each case for so long as Harbert continues to substantially perform his duties and functions hereunder to the best of his ability and skill in such a manner as to promote the best interests of the Company.  Harbert further agrees to serve as a director on the boards of directors of the Company’s subsidiaries or affiliated entities and in one or more executive offices of any of the Company’s subsidiaries or affiliated entities.

5.           LIMITATIONS ON AUTHORITY.

(a)           Notwithstanding anything else herein contained, Harbert shall adhere to the written limitations on authority as issued from time to time by the Board.  Nothing contained herein shall be deemed to restrict the power of the Board to limit the authority of Harbert.  Any violation of the terms of this Section 5(a) shall be deemed to be a material violation of a provision of this Agreement.

(iv)           The formulation of the business goals of Hawk;

(v)           The merger, consolidation, combination, liquidation, or sale of all or substantially all the assets or stock of Hawk or any of its affiliates that are material to Hawk as a whole and the acquisition or purchase of all or substantially all the assets or stock of another company or entity that is material to Hawk as a whole; and

(vi)           Any other matter which would have a material effect on the business, operations, financial condition or affairs, assets or properties of Hawk.

(c)           Harbert is not vested with any authority to set policy on behalf of the Company.

Failure to comply with this Section 5 shall not be deemed a material breach of this Agreement.

6.             DEATH OF EMPLOYEE.

(a)           In the event Harbert should die during the Advisory Period and:

(i)           at the time of Harbert’s death, Harbert has a wife, then:  (A)  payments shall be made pursuant to and in accordance with the Amended and Restated Wage Continuation Agreement between the Company and Harbert dated as of December 31, 2001, and the First Amendment to Restated Wage Continuation Agreement of even date (collectively, the “Wage Continuation Agreement”), which are herein incorporated by reference; (B) the Company shall pay to Harbert’s wife the amount of bonus which Harbert would have received under Section 2(c) hereof for the year of Harbert’s death which shall be prorated for the portion of the year ending upon the date of death; and (C) the Company shall continue to provide and/or pay for the existing health care coverage to Harbert’s wife to the maximum extent allowable in all respects under applicable law; provided , however , that Harbert’s surviving spouse’s primary provider of medical coverage shall be Medicare and the Company’s health care coverage shall be the secondary payor; and provided further , however , that the combined benefits of Medicare and the Medicare supplemental policy shall be substantially the same as then available under the Company’s existing health care coverage for active employees; or

(ii)           at the time of Harbert’s death, Harbert has no wife, then the Company shall:  (A) for a period of two (2) years, continue to pay Harbert’s Base Wages at the same monthly amount earned by Harbert immediately prior to his death to Harbert’s beneficiaries or estate; and (B) pay to Harbert’s beneficiaries or his estate, the amount of bonus which the Harbert would have received under Section 2(c) hereof for the year of Harbert’s death which shall be prorated for the portion of the year ending upon the date of death.

(b)           To ensure compliance with Section 409A, the Company shall pay:

(i)           any amount payable under Section 6(a)(i)(B) or (a)(ii)(B) by no later than March 15 of the calendar year following the year of Harbert’s death;

(ii)           all amounts payable under Section 6(a)(ii)(A) semi-monthly in accordance with the Company’s normal payroll procedures in effect on the date of this Agreement beginning with the first month following the month of Harbert’s death; and

(iii)           to the extent that any continued payments or reimbursements of health care coverage under Section 6(a)(i)(C) above are deemed to constitute taxable compensation, any such payment due to Harbert’s wife shall be paid on or before the last day of the calendar year following the calendar year in which the related expense was incurred.  The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and the right of Harbert’s wife to such payments or reimbursement shall not be subject to liquidation or exchange for any other benefit.

7.           DISABILITY OF EMPLOYEE.

[INTENTIONALLY OMITTED.]

8.           TERMINATION.

(a)           The Company may terminate Harbert’s employment hereunder at any time for cause, which shall be deemed to include the following:  (i) Harbert’s engaging in fraud, misappropriation of funds, embezzlement or like conduct committed against the Company; or (ii) Harbert’s conviction of a felony.

(b)           Harbert’s employment hereunder may be terminated by the Company in the event of Harbert’s voluntarily leaving the employ of the Company.

(c)           If the Company terminates the employment of Harbert:

(i)           for cause pursuant to Section 8(a), then the Company shall not be obligated to make any further payments to Harbert under this Agreement or otherwise (including, without limitation, any accrued and unpaid bonuses and severance benefits), except for amounts of any earned and unpaid Base Wages;

(ii)