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Exhibit 10.38
TRANSITION AGREEMENT, RELEASE AND WAIVER
THIS TRANSITION AGREEMENT, RELEASE AND WAIVER ("Agreement") is
executed
this 7th day of January, 2004, by and
between MICHAEL CORKRAN, an individual
residing at 12805 Keystone Lane Lane,
Chardon, Ohio 44024, referred to in this
Agreement as "Corkran", and HAWK
CORPORATION, a Delaware corporation whose
principal address is 200 Public Square,
Suite 30-5000, Cleveland, Ohio 44114,
referred to in this Agreement as
"Hawk."
R E C I T A L S :
Corkran was originally employed by Hawk as President of its
Powder
Metal Group in August of 2001. He is
currently employed as President of Hawk
Precision Components Group, Inc.
("HPCG").
Corkran now desires to phase out of his employment with Hawk and
its
affiliated companies, and Hawk is willing
to accommodate that desire, upon the
terms and conditions hereinafter set forth.
Accordingly, Corkran and Hawk agree
as follows:
1.
CONTINUING EMPLOYMENT, TERMINATION OF EMPLOYMENT RELATIONSHIP;
CONSULTING.
(a) Corkran
shall remain in his current position until
the effective date of the installation of a
new President of HPCG, which the
parties now contemplate to take place on or
about January 1, 2004.
(b) During the
period from January 1, 2004 through March
31, 2004, Corkran will serve as an advisor
to the President of HPCG on a full
time basis, at his present rate of pay and
fringe benefits. Line authority will
be vested in the new President, and
Corkran's time will be devoted to assisting
in and supporting the transition of the
group to new leadership. Corkran's time
will also be spent working on such other
projects as may be assigned by the
chairman of Hawk, so long as such
assignments are consistent with Corkran's
position as a former group president.
Specific areas of focus will include, but
will not necessarily be limited to; sales
support and the smooth transition of
third party relationships such as with
Hoganas, Hoeganaes, Hydropulsor, and SMS
Meer to the new President.
(c) Corkran
agrees that (i) he will not accept any full
time employment (other than the employment
described in this Agreement) until
March 31, 2004, and (ii) after that date,
if he does accept other employment
Corkran will provide Hawk with at least
thirty (30) days prior notice before he
leaves Hawk and begins other full time
employment. In the event Corkran does
accept other full time employment, his
compensation from Hawk will cease
immediately.
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(d) If Corkran
has not accepted other fulltime
employment, during the period from April 1,
2004 through June 30, 2004, Corkran
will continue to serve as an employee of
Hawk, as an advisor to the president of
HPCG, and reporting to that president.
Corkran will be compensated by a salary
equal to seventy five percent (75%) of his
current rate of base compensation.
(e) Through
June 30, 2004, Corkran will continue to
receive fringe benefits such as health
insurance, car allowance, etc., but he
will not be entitled to receive any
additional stock options or incentive
compensation. On June 30, 2004, Corkran's
tenure as an employee of Hawk and its
affiliates shall formerly end, and June 30,
2004 is sometimes referred to in
this Agreement as the "Termination
Date."
(f) Beginning
on July 1, 2004, Corkran will become a
consultant of Hawk, on an as needed basis.
He will be compensated for consulting
services at the rate of $2,000 per day.
2.
HEALTH INSURANCE. Hawk will continue to provide health
insurance coverage to Corkran, through the
end of June, 2004 (the "Coverage
Period"), on the same basis as such
coverage is provided to employees of Hawk in
general, but in no event shall Hawk be
required to provide greater coverage than
that which was in effect immediately prior
to the date hereof. Corkran must make
any required employee contributions or
co-payments in a timely fashion in order
to maintain this coverage. At the end of
the Coverage Period, Corkran shall have
such rights of conversion and/or
continuation as may be provided by the terms of
the applicable health insurance contract
and as may be required under applicable
law.
3.
RELEASE AND WAIVER. With respect to any and all events arising
out of or related to the employment
relationship between Corkran and Hawk, HPCG
and any entity affiliated with Hawk or HPCG
(such entities being referred to
collectively hereinafter as "Employer"),
occurring on or before the date of this
Agreement:
(a) Corkran
hereby releases and forever discharges
Employer from any and all claims, demands
and causes of action; this includes,
among other things, claims based on the
legal theories of wrongful or unjust
termination, breach of contract (express or
implied, including without
limitation a certain letter agreement dated
on or about August 7, 2001),
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,
and any and all forms of employment
discrimination, and including claims for
attorneys' fees, expenses and costs
related to any of the foregoing;
(b) Corkran
hereby releases and forever discharges
Employer 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 1964, under 42
U.S.C. Section 1981, 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
Chapter 4112 of the Ohio Revised Code, 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.
Section 206(d); and
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(c) Corkran
agrees not to institute a lawsuit with
respect to any matters released or any
rights waived in this Agreement.
(d) Nothing
contained in this Agreement is intended to
constitute a release or waiver of any claim
arising out of or related to a
party's breach of any of his/its
obligations pursuant to the terms of this
Agreement.
4.
CONFIDENTIALITY OF AGREEMENT. Each party agrees that the
existence of this Agreement and its terms
and conditions are confidential and
are to be held in strict confidence by the
parties and their counsel; provided,
however, that (i) the parties shall be
entitled to disclose such terms to their
respective attorneys and accountants, (ii)
Corkran may disclose such terms to
his spouse, so long as she also agrees to
hold such information confidential,
(iii) Hawk may disclose such terms to those
executive level employees who have a
reasonable need to know, in connection with
the performance of their job duties,
so long as each such employee also agrees
to hold such information confidential
and (iv) disclosure shall be permitted if
required by legal process, but not
before the third business day after such
party has both received notice of such
process and has delivered a copy thereof to
the other party hereto. No party
will voluntarily reveal or engage in any
action which it knows or should know
will result in the revelation of any
information to any third party concerning
the existence of this Agreement, the
contents of this Agreement, or the basis
upon which the claims of the parties have
been settled and compromised; the
party may indicate only that all matters
have been settled. Notwithstanding the
foregoing, Hawk shall be entitled to make
any disclosure concerning this
Agreement and its terms and conditions that
it believes to be required under
laws or regulations applicable to reporting
by publicly-held companies.
5.
COVENANTS OF NON-COMPETITION AND NON-SOLICITATION.
(a) Corkran
agrees that, during the two (2) year period
beginning on the date of this Agreement
(the "Restricted Period"), Corkran shall
not, directly or indirectly, either within
any state of the United States of
America in which Employer has done business
or with respect to any customer
serviced or solicited by Employer during
Corkran's employment, compete with
Employer in any aspect of "the Company's
Business" as hereinafter defined, on
behalf of himself or any other person,
firm, business, corporation or other
entity (each such person, firm, business or
other entity being referred to
hereinafter as a "Person"), including,
without limitation, that Corkran shall
not (i) engage in the Company's Business
for his own account; (ii) enter the
employ of, or render any services to, any
Person engaged in the Company's
Business; (iii) become interested in any
Person engaged in the Company's
Business as an owner, partner, shareholder,
officer, director, licensor,
licensee, employee, agent, employee,
trustee, or in any other relationship or
capacity; provided, however, that Corkran
may own, directly or indirectly,
solely as an investment, securities of any
corporation which are traded on any
national securities exchange if he (A) is
not a controlling person of, or a
member of a group which controls, such
corporation, or (B) does not, directly or
indirectly, own 1% more of any class of
securities of such corporation; or (iv)
request or instigate any account or
customer of Employer to withdraw, diminish,
curtail or cancel any of its business with
Employer. In the event of Corkran's
breach of any provision of this paragraph,
the r
