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:
Sinterloy Corporation 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)
Sinterloy Corporation 401(k) Plan
December 31, 2002 and 2001 and Year Ended December 31, 2002
Sinterloy Corporation 401(k) Plan
Financial Statements and Supplemental Schedule
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
Sinterloy Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2002 2001
--------------- ---------------
(UNAUDITED)
ASSETS
Investments, at fair value:
Pooled separate accounts $ 294,869 $ 297,521
Hawk Corporation common stock 30,925 27,828
Guaranteed Income Fund, at contract value 475,597 453,560
Participant loans 94,026 87,891
--------------- ---------------
895,417 866,800
Contributions receivable:
Employer 72
Employee 145
--------------- ---------------
217
NET ASSETS AVAILABLE FOR BENEFITS $ 895,634 $ 866,800
=============== ===============
See notes to financial statements.
1
Sinterloy Corporation 401(k) Plan
Statement of Changes in Net Assets Available for Benefits (Unaudited)
Year Ended December 31, 2002
Additions:
Interest income 27,746
Contributions:
Employer 32,450
Employee 64,894
------------
97,344
------------
Total additions 125,090
Deductions:
Benefit payments 7,138
Fees and expenses 7,515
------------
Total deductions 14,653
Net realized and unrealized depreciation
in fair value of investments (81,603)
------------
Net increase 28,834
Net assets available for benefits at beginning of year 866,800
------------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 895,634
============
See notes to financial statements.
2
Sinterloy Corporation 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 Sinterloy Corporation 401(k) Plan (the "Plan")
provides only general information. Participants should refer to the summary plan
description for a more complete description of the Plan's provisions.
GENERAL
The Plan was established January 1, 1995 as a defined contribution plan covering
all non-union employees of Sinterloy Corporation (the Company and Plan Sponsor)
who have completed one year 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 10% of their
pretax compensation to the Plan subject to maximum limitations set by the
Internal Revenue Code. The Plan Sponsor makes a matching contribution equal to
50% of the participant's contribution up to 10% of the participant's
compensation. The Plan Sponsor also provides that the Plan Sponsor make
additional discretionary contributions. The Plan Sponsor did not make a
discretionary contribution for the 2002 Plan year. Forfeited balances are
allocated back to participant's accounts under the same manner as the
discretionary contributions. At December 31, 2002, there were no forfeitures
available to allocate to participants.
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
Sinterloy Corporation 401(k) Plan
Notes to Financial Statements--Continued
A. DESCRIPTION OF THE PLAN - CONTINUED
VESTING AND DISTRIBUTIONS
Participants are immediately vested in their contributions. Prior to January 1,
1999, participants were 100% vested in Plan Sponsor matching contributions.
Beginning January 1, 1999, vesting of Plan Sponsor discretionary and matching
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 Plan Sponsor and employee contributions in any of several investment
options, including the Hawk Corporation common stock.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to the lesser of $50,000 or
50% of their vested balance. Loan terms range from 1 to 5 years. The terms of
such a loan are determined by the Company based on maturity dates quoted by
commercial banks for a similar loan. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates at the time of application. Principal and interest is paid
through monthly payroll deductions.
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 lump sum.
EXPENSES
The Plan Sponsor pays substantially all costs of Plan administration.
4
Sinterloy Corporation 401(k) Plan
Notes to Financial Statements--Continued
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. Participant loans are valued at the
outstanding balance, which approximates fair value.
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 $ 66,354
Hawk Corporation common stock 15,249
-------------
$ 81,603
=============
5
Sinterloy Corporation 401(k) Plan
Notes to Financial Statements--Continued
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 $ 475,597 $ 453,560
S&P 500 Index Fund 59,810 63,206
CIGNA Lifetime 30 78,200 61,394
Participant Loans 94,026 87,891
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
Sinterloy Corporation 401(k) Plan
Employer Identification Number: 31-1549254
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 $ 475,597
CIGNA Lifetime 20 Fund 7,090
CIGNA Lifetime 30 Fund 78,200
CIGNA Lifetime 40 Fund 19,416
CIGNA Lifetime 50 Fund 3,996
S&P 500 Index Fund 59,810
Janus Fund 14,724
Janus Worldwide Fund 20,157
White Oak Growth Stock Fund 19,026
Hawk Corporation common stock 30,925
Large Cap Value/John A. Levin & Co. Fund 3,717
Mid Cap Value/Wellington Management 15,277
Mid Cap Growth/Artisan Partners 17,673
Small Cap Value/Berger Fund 33,184
Small Cap Growth/TimesSquare Fund 2,599
* Participant loans (interest rates from 5.25% to 10.50%) 94,026
-------------
$ 895,417
=============
* 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.
Sinterloy Corporation 401(k) Plan
Date: June 25, 2003
By: /s/ Thomas A. Gilbride
----------------------
Thomas A. Gilbride
Plan Administrator