SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO ___________
COMMISSION FILE NUMBER: 333-68583
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Hawk Motors Employees' 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Hawk Corporation
200 Public Square, Suite 30-5000
Cleveland, Ohio 44114
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE (UNAUDITED)
Hawk Motors Employees' 401(k) Plan
December 31, 2002 and 2001 and Year Ended December 31, 2002
Hawk Motors Employees' 401(k) Plan
Financial Statements and Supplemental Schedule (Unaudited)
December 31, 2002 and 2001 and
Year Ended December 31, 2002
TABLE OF CONTENTS
Financial Statements
Statements of Net Assets Available for Benefits (Unaudited).................................................... 1
Statement of Changes in Net Assets Available for Benefits (Unaudited).......................................... 2
Notes to Financial Statements (Unaudited)...................................................................... 3
Supplemental Schedule
Schedule H, Line 4i--Schedule of Assets (Held at End of Year) (Unaudited)....................................... 7
Hawk Motors Employees' 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2002 2001
------------ ------------
(UNAUDITED)
ASSETS
Investments, at fair value:
Pooled separate accounts $ 1,266,352 $ 1,871,780
Hawk Corporation common stock 789 6,735
Guaranteed Income Fund, at contract value 752,112 550,170
------------ ------------
2,019,253 2,428,685
Contributions receivable:
Employer 288 8,031
Employee 4,204
------------ ------------
4,492 8,031
NET ASSETS AVAILABLE FOR BENEFITS $ 2,023,745 $ 2,436,716
============ ============
See notes to financial statements.
1
Hawk Motors Employees' 401(k) Plan
Statement of Changes in Net Assets Available for Benefits (Unaudited)
Year Ended December 31, 2002
Additions:
Interest income $ 28,808
Contributions:
Employer 10,910
Employee 130,556
------------
141,466
------------
Total additions 170,274
Deductions:
Benefit payments 128,406
Fees and expenses 424
------------
Total deductions 128,830
Net realized and unrealized depreciation
in fair value of investments (454,415)
------------
Net decrease (412,971)
Net assets available for benefits at beginning of year 2,436,716
------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 2,023,745
============
See notes to financial statements.
2
Hawk Motors Employees' 401(k) Plan
Notes to Financial Statements (Unaudited)
December 31, 2002 and 2001 and
Year Ended December 31, 2002
A. DESCRIPTION OF THE PLAN
The following description of the Hawk Motors, Inc. Employees' 401(k) plan (the
"Plan") provides only general information. Participants should refer to summary
plan description for a more complete description of the Plan's provisions.
GENERAL
The Plan was established January 1, 1993 as a defined contribution plan covering
all full-time employees of Hawk Motors, Inc (the Company and Plan Sponsor) who
have completed three months of service, as defined. The Company is a wholly
owned subsidiary of Hawk Corporation. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may elect to contribute not less than 1% nor more than 15% of their
pretax compensation to the Plan subject to maximum limitations set by the
Internal Revenue Code. The Plan allows for discretionary contributions by the
Plan Sponsor. Plan Sponsor discretionary contributions are allocated based on
the proportion a participant's compensation bears to the total compensation paid
to all eligible participants. The Plan Sponsor did not make a discretionary
contribution for the 2002 Plan year. Forfeitures are used to reduce future Plan
Sponsor contributions. At December 31, 2002 and 2001, there was $714 and $742,
respectively in forfeitures available to reduce future contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Plan Sponsor's contributions and (b) Plan earnings.
Allocations are based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account.
3
Hawk Motors Employees' 401(k) Plan
Notes to Financial Statements -- Continued
A. DESCRIPTION OF THE PLAN - CONTINUED
VESTING AND DISTRIBUTIONS
Participants are immediately vested in their contributions. Vesting of Plan
Sponsor discretionary contributions is based upon years of continuous service. A
participant is 100% vested after six years of credited service based on a graded
vesting schedule. Distributions from a participant's account are limited to
termination of employment, death, retirement or proven hardship.
INVESTMENT OPTIONS
The Plan's funds are primarily held in a group annuity contract issued by
Connecticut General Life Insurance Company (CIGNA or the Trustee). A participant
may direct Plan Sponsor and employee contributions in any of several investment
options, including the Hawk Corporation common stock.
PAYMENT OF BENEFITS
In the case of normal retirement, death, permanent disability or termination
prior to retirement, a participant may elect to receive the payout of his or her
vested account balance in the form of installments, an annuity or a lump sum.
EXPENSES
The Plan Sponsor pays substantially all costs of Plan administration.
B. SUMMARY OF ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments in the Guaranteed Income Fund are stated at contract value as
determined by CIGNA, which approximates fair value. CIGNA has the right to defer
certain disbursements (excluding retirement, termination, and death or
disability disbursements) or transfers from the Guaranteed Income Fund when
total amounts disbursed from the pool in a given calendar year exceed 10% of the
total assets in that pool on January 1 of that year.
All other investments are stated at fair value as determined by the Trustee, on
the last business day of the Plan year.
4
Hawk Motors Employees' 401(k) Plan
Notes to Financial Statements -- Continued
B. SUMMARY OF ACCOUNTING POLICIES - CONTINUED
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
C. INVESTMENTS
During 2002, the Plan's investments (including investments purchased, sold, as
well as held, during the year) depreciated in fair value as follows:
NET REALIZED
AND UNREALIZED
DEPRECIATION
IN FAIR VALUE
OF INVESTMENTS
--------------
Pooled separate accounts $ 450,102
Hawk Corporation common stock 4,313
----------
$ 454,415
==========
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
DECEMBER 31
2002 2001
---------- ------------
Guaranteed Income Fund $ 752,112 $ 550,170
Janus Fund 844,579 1,268,017
S&P 500 Index Fund 128,328
5
Hawk Motors Employees' 401(k) Plan
Notes to Financial Statements -- Continued
D. PLAN TERMINATION
Although it has not expressed any intent to do so, the Plan Sponsor has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
E. INCOME TAX STATUS
The Plan has received an opinion letter from the Internal Revenue Service dated
February 6, 2002, stating that the written form of the underlying prototype plan
document is qualified under Section 401 (a) of the Internal Revenue Code (the
Code), and that any employer adopting this form of a plan will be considered to
have a plan qualified under Section 401 (a) of the Code. Therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
6
Hawk Motors Employees' 401(k) Plan
Employer Identification Number: 34-1608009
Plan Number: 005
Schedule H, Line 4i--Schedule of Assets (Held at End of Year) (Unaudited)
December 31, 2002
Identity of Issue, Borrower, Lessor or Current
Similar Party/Description of Investment Value
- ------------------------------------------ -----------
* Connecticut General Life Insurance
Company--Group Annuity Contract:
Guaranteed Income Fund $ 752,112
CIGNA Lifetime 20 Fund 2,589
CIGNA Lifetime 30 Fund 13,449
CIGNA Lifetime 40 Fund 66,645
CIGNA Lifetime 50 Fund 1,760
CIGNA Lifetime 60 Fund 51
S&P 500 Index Fund 87,150
Janus Fund 844,579
Janus Worldwide Fund 14,723
White Oak Growth Stock Fund 71,007
Hawk Corporation common stock 789
Mid Cap Value/Wellington Management 73,210
Mid Cap Growth/Artisan Partners 27,795
Small Cap Value/Berger Fund 59,769
Small Cap Growth/TimesSquare Fund 2,687
Large Cap Value/John A. Levin 435
State Street Global Adv Interm Bond 503
-----------
$ 2,019,253
===========
* Indicates a party-in-interest to the Plan.
7
INDEX TO EXHIBITS
99.1* Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
99.2* Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Hawk Motors Employees' 401(k)
Date: June 25, 2003
By: /s/ Thomas A. Gilbride
----------------------
Thomas A. Gilbride
Plan Administrator