11-K 1 l01516ae11vk.txt HAWK MOTOR EMPLOYEES' (HAWK CORP.) | FORM 11-K 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