TRUST AGREEMENT
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Carpenter Technology Corporation
Non-Qualified Benefits Trust for Directors
TRUST AGREEMENT effective as of the 7th day of December, 1990,
by and between Carpenter Technology Corporation, a corporation organized under
the laws of the State of Delaware (hereinafter referred to as the "Company"),
and THE CHASE MANHATTAN BANK, N.A., a banking association organized under the
laws of the United States of America (hereinafter referred to as the
"Trustee").
BACKGROUND
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The Company maintains the benefit plans listed on Exhibit A hereto
(the "Plans") for the benefit of various of its Directors. The Company
intends to create a trust, to which it will contribute cash, or other property
acceptable to the Trustee, to help the Company meet its obligations under the
Plans, and to assure that, subject to the sufficiency of the Trust Fund,
payments provided for by the Plans are not improperly withheld in the event of
a Change in Control of the Company.
The establishment of this Trust shall not affect the Company's
continuing obligation to make payments under the Plans, except that the
liability shall be reduced to the extent payments are made by the Trustee
hereunder.
The assets of the Trust Fund shall be, and shall remain, subject to the
claims of the Company's general creditors in the event of the Company's
insolvency. Otherwise, the Trust shall be irrevocable until all liabilities
under all Plans have been satisfied, at which time the Trust shall terminate,
and all remaining assets of the Trust Fund shall be returned to the Company.
The Trust is intended to be a "grantor trust" with the result that
the corpus and income of the Trust are treated as assets and income of the
Company pursuant to sections 671 through 679 of the "Code".
The Company intends that the Plans not be deemed funded (within
the meaning of Title I of ERISA) despite the existence of this Trust.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Trustee covenant and agree as follows:
ARTICLE I
DEFINITIONS; ESTABLISHMENT OF TRUST
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Section 1.01 Definitions. Whenever used in this Trust
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Agreement, unless otherwise provided or the context otherwise requires:
(a) "Account" shall mean an account maintained in respect of a
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Participant pursuant to Section 4.02.
(b) "Benefits" shall mean, with respect to each Participant, the
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benefits payable to or in respect of that Participant pursuant to the
applicable Plan listed on Exhibit A.
(c) "Change in Control" is defined in Article III.
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(d) "Code" shall mean the Internal Revenue Code of 1986, as
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amended from time to time.
(e) "Committee" shall mean the Compensation and Stock Option
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Committee of the Company's Board of Directors.
(f) "Company" shall mean Carpenter Technology Corporation or any
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successor company by merger, acquisition or otherwise.
(g) "ERISA" means the Employee Retirement Income Security Act of
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1974, as amended from time to time.
(h) "Participant" shall mean each person entitled to benefits
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under any Plan, including the beneficiaries pursuant to any Plan.
(i) "Plan" shall mean any plan listed on Exhibit A hereto, as in
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effect from time to time. "Plans" shall mean all such plans.
(j) "Trust" shall mean the trust established under this Trust
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Agreement.
(k) "Trust Agreement" shall mean this trust agreement, as from
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time to time amended.
(l) "Trust Fund" shall mean the trust fund held from time to
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time by the Trustee hereunder consisting of all contributions received by the
Trustee together with the investments and reinvestment made therewith and all
net profits and earnings thereon less all payments and charges therefrom.
(m) "Trustee" shall mean The Chase Manhattan Bank, N.A., or its
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successor, or an officer, director or employee of such a Trustee exercising
any fiduciary powers under this Trust Agreement; provided, however, that in no
event may any subsidiary or affiliate of the Company or any Participant be
such a successor Trustee.
Section 1.02 Establishment and Title of the Trust. The Company
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hereby establishes with the Trustee a trust to be known as the "Carpenter
Technology Corporation Non-Qualified Benefits Trust for Directors,"
consisting of such sums of money and other property acceptable to the
Trustee as from time to time may be paid or delivered to the Trustee pursuant
to this Trust Agreement. The Trust Fund shall be held by the Trustee in
trust and shall be dealt with in accordance with the provisions of this
Trust Agreement.
Section 1.03 Acceptance by the Trustee. The Trustee accepts
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the Trust established hereunder on the terms and conditions set forth herein
and agrees to perform the duties imposed on it by this Trust Agreement.
ARTICLE II
INVESTMENT AND ADMINISTRATION OF THE TRUST FUND
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Section 2.01 Powers and Duties of the Trustee. In addition
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to every power and discretion conferred upon the Trustee by any other
provision of this Trust Agreement, the Trustee shall have the following
express powers with respect to the Trust Fund:
(a) To make investments and reinvestments of the assets of the
Trust Fund
(i) in direct obligations of the United States of America
or agencies of the United States of America or
obligations unconditionally and fully guaranteed as to
principal and interest by the United States of
America, in each case maturing within three (3) years
or less from the date of acquisition; or
(ii) in negotiable certificates of deposit or bank investment
contracts (in each case maturing within three (3) years
or less from the date of acquisition) issued by a commer-
cial bank, including the Trustee, organized and existing
under the laws of the United States of America or any
state thereof having a combined capital and surplus of
at least $1,000,000,000, and a Moody's senior debt rating
of at least an "A-" or equivalent.
(iii) in money market or similar interest bearing accounts
maintained by the Trustee.
(iv) in any commingled trust fund maintained by the Trustee
for the collective investment of trust funds or any
mutual fund, which invests in portfolios of assets
described in this Section 2.01(a).
(v) notwithstanding Section 2.01(a)(i) and (ii) to the
contrary, any funds contributed during a period in
which a Potential Change in Control exists, shall only
be invested or reinvested in U.S. Treasury instruments
with a maturity not to exceed ninety (90) days, or as
provided in Section 2.01(a)(iii).
(b) To employ agents, experts and counsel; to delegate
discretionary powers to, and rely upon information and advice furnished by
such agents, experts and counsel, and to pay their reasonable fees and
disbursements as an expense of the trust fund upon obtaining the Company's
prior consent, which shall not be unreasonably denied, and provided further
that such consent shall be deemed to have been given if, within ten business
days of being notified by the Trustee, in writing, of its intention to incur
such expenses, the Company has not objected thereto and provided that Company
consent shall not be required with respect to this Section 2.01(b) if notice
of a Change in Control has been given to the Trustee under Section 3.03; and
(c) From time to time to register any property in the name of
its nominee or in its own name, or to hold it unregistered or in such form
that title shall pass by delivery or to cause the same to be deposited in a
depository or clearing corporation or system established to settle transfers
of securities and to cause such securities to be merged and held in bulk by
the nominee of such depository or clearing corporation or system.
ARTICLE III
CHANGE IN CONTROL
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Section 3.01 Definition of Change in Control. For purposes
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of this Trust, a "Change in Control" of the Company shall be deemed to have
occurred if
(a) A "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities; or
(b) during any period of two consecutive years (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board and
any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in Section 3.01(a), 3.01(c) or 3.01(d) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 75% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
Section 3.02 Definition of a Potential Change in Control.
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For purposes of this Trust, a "Potential Change in Control" of the Company
shall be deemed to have occurred if
(a) The Company enters into an agreement, the consummation
of which would result in the occurrence of a change in control of the
Company,
(b) any person (including the Company) publicly announces
an intention to take or to consider taking actions which if consummated
would constitute a change in control of the Company;
(c) any person, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, who is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities,
increases his beneficial ownership of such securities by 5% or more of
the combined voting power of the Company's then outstanding securities
on the effective date of this Agreement; or
(d) the Board of Directors of the Company adopts a
resolution to the effect that, for purposes of this Trust, a "potential
change in control" has occurred. Such a resolution will be provided to
the Trustee in certified form.
Section 3.03 Requirement of Notice. Notwithstanding the
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definitions in Sections 3.01 and 3.02, no Change in Control or Potential
Change in Control shall be deemed to have occurred for purposes of this Trust
Agreement unless and until the Trustee has actual written notice from the
Company or from any person who was an officer of the Company prior to the
alleged Change in Control or the alleged Potential Change in Control that such
Change in Control or Potential Change in Control has occurred.
ARTICLE IV
CONTRIBUTIONS
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Section 4.01 Contributions by the Company.
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(a) The Company will make contributions hereunder at such times,
and in such amounts, as the Company may determine to be appropriate to enable
the Trust to accumulate assets sufficient to pay all, or any part, as
determined by the Company, of the benefits payable under the Plans.
(b) Upon the occurrence of a Potential Change in Control, the
Company, if it so chooses, will deliver to the Trustee cash and/or marketable
securities having a fair market value in an amount equal to the sum of the
amounts, determined by an actuary selected by the Company, which will be
sufficient to fund fully the Company's obligations to pay to the Participants
the full amount of all Benefits to which they may become entitled pursuant to
the Plans. The actuarial basis employed by such actuary shall include the
following assumptions: no interest will be earned on plan assets; Directors'
fees will increase at the rate of 10% per annum; there will be no change in
the plan; and, a Director will be assumed to terminate at such time as to
maximize his benefits under the Plans but not later than age 70. Any such
contribution shall be identified to the Trustee, by the Company, as a Section
4.01(b) contribution.
(c) In addition to contributions made to the Trust pursuant to
Sections 4.01(a) and 4.01(b), the Company shall deliver to the Trustee any
amounts which the Trustee is required to pay pursuant to Section 6.02.
(d) The Trustee shall be responsible only for contributions actually
received by it hereunder. The Trustee shall have no duty or authority to
ascertain whether any contributions should be made to it or to bring any
action or proceeding to enforce any obligation to make any such contribution.
Section 4.02 Accounts.
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(a) Before a Change In Control. The Company shall create a separate
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Account for each Participant, cause records to be maintained by the Company,
or retain a separate recordkeeper as the Company's agent, reflecting the
amount, if any, credited to that Participant in accordance with the terms of
the Deferred Compensation Plan for Nonmanagement Directors of Carpenter Tech-
nology Corporation (the "Deferred Compensation Plan"). When a contribution
is made, the Company shall notify the Trustee of the amount of such contribu-
tion allocable to each Participant's Account and/or specific plans. The
Trustee shall not be required to maintain any separate account records, but
shall rely solely upon the information maintained by the Company and the
notice to the Trustee as herein provided. The remainder, (or all thereof if
no allocation is indicated) of such contribution shall not be specifically
allocated to any Plan or any Participant, but shall be available to discharge
the Company's obligations to make benefit payments under any of the Plans in
accordance with the applicable provisions of Article V. The Company shall,
however, provide to the Trustee, with respect to each Plan, at such intervals
as the Company shall determine, but in no event less frequently than annually,
a schedule listing each Participant, each Plan under which that Participant has
accrued a benefit and the amount of such benefit. The Trustee shall have no
responsibility with respect to the determination or accuracy of any such
allocations and/or the accrued benefits due any participant or plan as herein
provided, but shall rely solely upon such information provided to it by the
Company.
(b) Following a Change In Control. Upon notice to the Trustee
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that a Change in Control has occurred, or that a Potential Change in Control
has occurred and that the Company has invoked the allocation procedures of
this Section 4.02(b), the Trustee, based upon the schedule of such benefits
most recently provided to the Trustee by the Company, shall allocate all of
the Trust Fund's assets as follows: assets shall first be allocated to the
Deferred Compensation Plan portion of each Participant's Account in an amount
equal to each Participant's accrued benefit therein not previously allocated
thereto. In the event that the Trust Fund's assets are insufficient to fully
fund each Participant's accrued benefit under the Deferred Compensation Plan,
the assets shall be allocated ratably to the Participants' Accounts in the
ratio that the accrued benefits in respect of each such Participant under said
Deferred Compensation Plan bear to the total accrued benefits of all such
Participants under said plan. The balance of the assets shall be allocated to
each participant's account in an amount equal to each participant's accrued
benefit under all of the Plans other than the Deferred Compensation Plans. If
the assets of the Trust Fund, after making provision for the Deferred
Compensation Plan, are insufficient to fully fund all of the accrued benefits
of all Participants under all of the other Plans, those assets shall be
allocated ratably to the Participants' Accounts in the ratio that the accrued
benefits in respect of each such Participant under all of such other Plans
bear to the total accrued benefits of all such Participants under all such
other Plans.
Section 4.03 Delivery to the Company. Any Section 4.01(b)
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contribution delivered to the Trustee shall be returned to the Company without
interest on the 181st day following (and exclusive of the date of) its receipt
by the Trustee, unless within 180 days following such receipt by the Trustee,
a notice of the "Change in Control" shall have been received by the Trustee
pursuant to Section 3.03. Such 180-day period shall be extended for an
additional 180-day period for any "Potential Change in Control" which occurs
or continues during any initial or extended 180-day period. The Company will
provide the Trustee with written notice of any extension.
Section 4.04 Trustee's Agent. The Trustee shall be entitled
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to retain such actuarial, accounting, legal and other services as it may deem
necessary to accomplish and/or maintain such allocations, payments and/or
Participant Account records as are provided for under Articles IV and V
hereof, and to pay for such services as an expense of the Trust Fund out of
the assets of the Trust Fund, unless promptly paid by the Company.
ARTICLE V
PAYMENT OF BENEFITS
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Section 5.01 Payments by Trustee.
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(a) Prior to a Change In Control. Until such time as Section
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5.01(b) applies, all payments to Participants in any of the Plans shall be
made by the Company, as agent for the Trustee, in accordance with the
applicable provisions of the Plans. Upon receipt of written instructions to
the Trustee from the Company of the amount needed to pay such benefits the
Trustee shall promptly disburse such funds to the Company and, upon that
disbursement shall have no further responsibility with respect to such funds
or their application.
(b) Following a Change In Control. Following notice to the
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Trustee that a Change in Control has occurred, and subject to the limitation
of Section 5.01(c), the Trustee shall make payments to Participants and their
beneficiaries from the Trust Fund in accordance with the payment schedule most
recently provided by the Company to the Trustee prior to the occurrence of the
Change in Control; provided, however, that if the Company and a Participant
agree to the substitution of a new payment schedule with respect to such
Participant following the occurrence of a Change in Control, the Trustee shall
instead make payments in accordance with such substitute payment schedule. In
the event that the Company and a Participant (or in the event of his death,
his Beneficiary) disagree as to the amount, form or duration of benefit
payments under a Plan, the Trustee shall continue to make benefit payments
pursuant to the payment schedule most recently provided by the Company prior
to a Change in Control until authorized to make payments under a substitute
schedule by both the Participant (or Beneficiary) and the Company or until the
Trustee receives a final non-appealable order from a court of competent
jurisdiction to alter such benefit payment schedule.
(c) Any amount paid under this Section 5.01 shall be charged by
the Company or the Trustee, as the case may be, against the Account of the
applicable Participant and no payment with respect to an Account shall be made
in excess of the amount credited to such Account.
(d) The Trustee shall not make any payments to Participants or
beneficiaries from the Trust Fund except as provided in this Section 5.01 even
though it may be informed from another source that payments are due under a
Plan. The Trustee shall be fully protected in making payments or omitting to
make payments in accordance with Section 5.01(b).
Section 5.02 Determinations by Committee or Company.
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(a) If at any time the Company or, if Section 5.01(b) applies, the
Trustee, determines that any amount held in the Trust Fund is includible in
the gross income of a Participant or his beneficiary for federal income tax
purposes prior to payment of such amount from the Trust Fund, the Trustee,
upon notice from the Company or, if Section 5.01(b) applies, upon notice by a
Participant or Beneficiary, in the format provided in Exhibit B, that based on
a (i) change in the tax or revenue laws of the United States of America, (ii)
a published ruling or similar announcement issued by the Internal Revenue
Service, (iii) a regulation issued by the Secretary of the Treasury or his
delegate, (iv) a decision by a court of competent jurisdiction involving the
Participant or Beneficiary, or (v) a closing agreement made under Code Section
7121 that is approved by the Internal Revenue Service and involves the
Participant or Beneficiary, that Participant or Beneficiary has recognized or
will recognize income for federal income tax purposes with respect to amounts
that are or will be payable to him under the Plans before they are paid to
him, shall pay such amount to such person in the manner directed by the
Committee or by such notice to the Trustee and the Participant's Account shall
be charged, or his accrued benefit reduced, accordingly.
(b) If at any time the Company prior to a Change in Control
determines that the amount allocated to the Account of any Participant exceeds
the amount reasonably expected to be necessary to provide the Benefits payable
in respect of such Participant from such Account, such excess may be
reallocated to the Accounts of other Participants or held as part of the
unallocated Fund, as determined by the Company. If at any time prior to a
Change in Control the Committee determines that the Benefits in respect of all
Participants have been paid in full, the Committee shall so notify the Trustee
in writing.
Section 5.03 Withholding, Returns and Reports.
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(a) Prior to a Change in Control. Prior to a Change in Control,
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the Company shall withhold all required federal, state and local taxes from
benefit payments under any of the Plans, and remit those withholdings to the
appropriate taxing authorities. The Company shall also be responsible for the
preparation of all information reports, returns, receipts and other
communications required by Chapter 61 of the Code to be filed with, or
distributed to, any person or governmental entity.
(b) Following a Change in Control. Following a Change in
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Control, the Trustee shall assume the Company's responsibilities under Section
5.03(a) with respect to benefit payments under any of the Plans, and shall
reduce such benefit payments by the amount of any such required withholding.
The Trustee shall remit the net benefit payments to the Participants and shall
pay the required tax withheld to the Company, which shall continue to be
responsible for the preparation and filing of all items required by Chapter 61
of the Code, as enumerated in Section 5.03(a).
(c) The Company and the Trustee shall cooperate with each other
in providing any information reasonably necessary to enable the other to carry
out any of its responsibilities under this Section 5.03.
Section 5.04 Company's Continuing Obligations.
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Notwithstanding any provisions of this Trust Agreement to the contrary, the
Company shall remain obligated to pay the Benefits under the Plan. To the
extent the amount in the Trust Fund is not sufficient to pay any Benefits when
due, the Company shall pay such deficiency directly to the person entitled
thereto. Nothing in this Trust Agreement shall relieve the Company of its
liabilities to pay the Benefits except to the extent such liabilities are met
by the application of Trust Fund assets.
Section 5.05 Company's Income. The Company agrees that all
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income, deductions and credits of the Trust Fund belong to it as owner for
income tax purposes and will be included on the Company's income tax returns
to the extent required by applicable law.
ARTICLE VI
CONCERNING THE TRUSTEE
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Section 6.01 Notices to the Trustee. Except as provided in
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Section 5.02, the Trustee may rely on the authenticity, truth and accuracy of:
(a) any notice, direction, certification, approval or other
writing of the Company, if evidenced by an instrument signed in the name
of the Company by its Chairman, President, any Vice President,
Secretary, Assistant Secretary or Treasurer, and believed in good faith
by it to be genuine;
(b) any notice, direction, certification, approval or other
written, oral or other transmitted form of instruction received by the
Trustee and believed by it in good faith to be genuine and to be sent by
or on behalf of the Committee; or
(c) any copy of a resolution of the Board of Directors of the
Company, if certified by the Secretary or an Assistant Secretary of the
Company under its corporate seal.
(d) The Company shall furnish the Trustee from time to time with
a list of the names and signatures of the officers or other persons
authorized to act under this Section 6.01(a) and (b), or in any other
manner authorized to notify or instruct the Trustee pursuant to the
provisions of this Agreement. Any such list shall be certified by the
Secretary or an Assistant Secretary of the Company, and may be relied
upon by the Trustee until it receives a revised list.
Section 6.02 Expenses of the Trust Fund. The Trustee shall
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pay out of the Trust Fund: (a) all brokerage fees and transfer tax expenses
and other expenses incurred in connection with the sale or purchase of
investments; (b) all real and personal property taxes, income taxes and other
taxes of any kind at any time levied or assessed under any present or future
law upon, or with respect to, the Trust Fund or any property included in the
Trust Fund; (c) the Trustee's compensation and expenses as provided in Section
6.03, unless promptly paid by the Company; and (d) unless promptly paid by the
Company, all other reasonable expenses of administering the Trust.
Notwithstanding the foregoing, the Trustee shall, at Company expense and
direction, contest the validity of any taxes in any manner deemed appropriate
by the Company or its counsel, but only if it has received an indemnity bond
or other security satisfactory to it to pay any expenses of such contest;
provided, however, that the Trustee shall have no obligation to contest if it
receives an opinion of counsel of its choice to the effect that there is no
basis in law or fact for such contest. Alternatively, the Company may itself
contest the validity of any such taxes.
Section 6.03 Compensation of the Trustee. The Company will
pay to the Trustee compensation for its services time to time in accordance
with its schedule of fees then in effect for trusts of similar nature, and
will reimburse the Trustee for all reasonable expenses (including attorneys'
fees) incurred by the Trustee in the administration of the Trust.
Section 6.04 Protection of the Trustee. The Company agrees
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to indemnify and hold harmless the Trustee from and against any and all
damages, losses, claims or expenses as incurred (including expenses of
investigation and fees and disbursements of counsel to the Trustee and any
taxes imposed on the Trust Fund or income of the Trust) arising out of or in
connection with the performance by the Trustee of its duties hereunder, except
to the extent that any such damages, losses, claims or expenses result from
the negligence or willful misconduct of the Trustee, its officers, employees
or agents.
Section 6.05 Duties of the Trustee. The Trustee will be
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under no obligation to perform any duties whatsoever, except such duties as
are specifically set forth as such in this Trust Agreement, and no implied
covenant or obligation will be read into this Trust Agreement against the
Trustee. The Trustee will not be compelled to take any action toward the
execution or enforcement of the Trust or to prosecute or defend any suit in
respect thereof, unless indemnified to its satisfaction against loss, costs,
liability and expense or there are sufficient assets in the Trust Fund to
provide such indemnity; and the Trustee will be under no liability or
obligation to anyone with respect to any failure on the part of the Company to
perform any of its obligations under the Plans. Nothing in this Trust
Agreement should be construed as requiring the Trustee to make any payment in
excess of amounts held in the Trust Fund at the time of such payment.
Section 6.06 Settlement of Accounts of the Trustee. The
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Trustee shall keep or cause to be kept accurate and detailed records of all
investments, receipts, disbursements and other transactions hereunder. Such
records shall be open to inspection and audit at all reasonable times during
normal business hours by any person designated by the Company. At least
annually, or upon such more frequent intervals, but not more frequent than
monthly, as the Company may direct, the Trustee shall file with the Company a
written statement, listing the investments of the Trust Fund and any
uninvested cash balance thereof, and setting forth all receipts,
disbursements, payments and other transactions respecting the Trust Fund not
included in any such previous statement. Any statement, when approved by the
Company, will be binding and conclusive on the Company; and the Trustee will
thereby be released and discharged from any liability or accountability to the
Company with respect to all matters set forth therein. Omission by the
Company to object in writing to any specific items in any such statement,
which shall be deemed an account stated, within ninety (90) days after its
delivery will constitute approval of the account by the Company. No other
accounts or reports shall be required to be given to the Company, except as
stated herein or except as otherwise agreed to in writing by the Trustee.
Except as provided above, the Trustee shall not be required to file an
accounting, judicial or otherwise.
Section 6.07 Right to Judicial Settlement. Nothing contained
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in this Trust Agreement shall be construed as depriving the Trustee of the
right to have a judicial settlement of its accounts, and upon any proceeding
for a judicial settlement of the Trustee's accounts or for instructions the
only necessary party thereto in addition to the Trustee shall be the Company.
Section 6.08 Resignation or Removal of the Trustee. The
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Trustee may at any time resign upon sixty (60) days notice in writing to the
Company (which sixty (60) days notice requirement may be waived by agreement
in writing of the Company). Prior to a Change in Control, or a Potential
Change in Control, the Trustee may be removed by the Company upon sixty (60)
days notice in writing to the Trustee (which sixty (60) days notice
requirement may be waived by agreement in writing of the Trustee).
Section 6.09 Appointment of Successor Trustee. In the event
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of the resignation or removal of the Trustee, or in any other event in which
the Trustee ceases to act, a successor trustee may be appointed by the Company
by instrument in writing delivered to and accepted by the successor trustee.
Notice of such appointment will be given by the Company to the retiring
trustee, and the successor trustee will deliver to the retiring trustee an
instrument in writing accepting such appointment. If no appointment of a
successor trustee is made within a reasonable time after such a resignation,
removal or other event, any court of competent jurisdiction may appoint a
successor trustee.
In the event of such resignation, removal or other event, the
retiring trustee or its successors and assigns shall file with the Company a
final statement to which the provisions of Section 6.06 shall apply.
In the event of the appointment of a successor trustee, such
successor trustee will succeed to all the right, title and estate of, and will
be, the Trustee; and the retiring trustee will after the settlement of its
final account as provided for in Section 6.06, and the receipt of any
compensation or expenses due it, deliver the Trust Fund to the successor
trustee together with all such instruments of transfer, conveyance, assignment
and further assurance as the successor trustee may reasonably require. The
retiring trustee will retain a first lien upon the Trust Fund to secure all
amounts due the retiring trustee pursuant to the provisions of this Trust
Agreement. The Company will provide the Trustee with a ratification and
release upon such resignation, removal or other event.
Section 6.10 Merger or Consolidation of the Trustee. Any
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corporation continuing as the result of any merger or resulting from any
consolidation to which merger or consolidation the Trustee is a party, or any
corporation to which substantially all the business and assets of the Trustee
may be transferred, will be deemed automatically to be continuing as the
Trustee.
ARTICLE VII
ENFORCEMENT
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Section 7.01 Enforcement of Trust Agreement and Legal
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Proceedings. The Company shall have the right to enforce any provision of
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this Trust Agreement in its own name. In any action or proceeding affecting
the Trust, the only necessary parties shall be the Company and the Trustee
and, except as otherwise required by applicable law, no other person shall be
entitled to any notice or service of process. Any judgment entered in such an
action or proceeding shall, to the maximum extent permitted by applicable law,
be binding and conclusive on all persons having or claiming to have any
interest in the Trust.
ARTICLE VIII
AMENDMENT, REVOCATION AND TERMINATION
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Section 8.01 Amendment. The Company may from time to time
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prior to the occurrence of a Change in Control or a Potential Change in
Control with respect to which the allocation procedures of Section 4.02(b) are
invoked, with the Trustee's consent, amend in writing, in whole or in part,
any or all of the provisions of this Trust Agreement without the consent of
any Participant or any other person; provided, however, that no such amendment
shall increase the duties or obligations or change the compensation of the
Trustee without the Trustee's written consent. This Trust Agreement may not
be amended following a Change in Control nor may it be amended following a
Potential Change in Control with respect to which the allocation procedures of
Section 4.02(b) are invoked unless the resulting allocations are revoked
pursuant to Section 4.03.
Section 8.02 Irrevocability. Subject to section 10.08, the
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Trust shall be irrevocable and, except as otherwise provided in Section 8.03
and Article IX, shall be held for the exclusive purpose of providing the
Benefits to Participants and their beneficiaries and defraying expenses of the
Trust in accordance with the provisions of this Trust Agreement.
Section 8.03 Termination. The Trust shall terminate if the
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Committee provides the Trustee with a written statement to the effect that the
Benefits in respect of all Participants have been paid in full. As soon as
practicable following such event, the Trustee shall settle its final accounts
in accordance with Section 6.06 and, after receipt of any unpaid fees and
expenses, shall distribute the balance of the Trust Fund to the Company,
provided, however, that after a Change in Control, such Committee statement
shall be accompanied by written approvals of the Participants then listed on
the most recent payment schedule provided to the Trustee pursuant to Section
4.02. In the event any such Participant does not approve, Section 5.01(b)
shall apply.
ARTICLE IX
CLAIMS OF COMPANY'S CREDITORS
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Section 9.01 Insolvency. As used in this Article IX, the
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Company shall be deemed to be "Insolvent" if (i) the Company is unable to pay
its debts generally as they come due, or (ii) the Company is subject to a
pending proceeding as a debtor under the federal Bankruptcy Code (or any
successor federal statute). In the event the Company shall be deemed
Insolvent, the assets of the Trust shall be subject to claims of creditors of
the Company (hereinafter referred to as "Bankruptcy Creditors").
Section 9.02 Discontinuance of Benefits. If at any time (i)
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the Company or a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, or (ii) the
Trustee is served with any order, process or paper from a court of competent
jurisdiction to the effect that the Company is Insolvent, the Trustee shall
give notice thereof to the Company, shall discontinue payment of Benefits
under this Trust Agreement, shall hold the Trust Fund for the benefit of the
Company's Bankruptcy Creditors, and shall resume payment of Benefits under
this Trust Agreement in accordance with Article V only upon: (a) in the case
of clause (ii) above, the receipt of an order of a court of competent
jurisdiction authorizing or requiring such payment, and (b) in the case of
clause (i) above, receipt of written notice from the Company that the Company
is not Insolvent. The Board of Directors of the Company and the Company's
Treasurer shall further be obligated to give the Trustee prompt written notice
in the event that the Company becomes Insolvent, with the same consequences as
provided in the immediately preceding sentence. If payment of Benefits has
been discontinued pursuant to clause (i) of the second preceding sentence, the
Board of Directors of the Company and the Company's Treasurer shall be
obligated to give the Trustee prompt written notice in the event the Company
is not Insolvent, and such notice from such Board of Directors or Treasurer
shall be treated as notice from the Company for purposes of the second
preceding sentence. The Trustee shall not be liable to anyone in the event
Benefits are discontinued pursuant to this Section 9.02.
If the Trustee discontinues payment of Benefits pursuant to this
Section 9.02 and subsequently resumes such payment, to the extent the Trust
Fund is sufficient for such purpose, the first payment to a Participant
following such discontinuance shall include an aggregate amount equal to the
payments which would have been made to such Participant under this Trust
Agreement but for this Section 9.02, as shall be determined by the Committee
or if Section 5.01(b) applies, by the Trustee. No interest shall be due or
payable with respect to any such payments in arrears.
ARTICLE X
MISCELLANEOUS PROVISIONS
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Section 10.01 Successors. This Trust Agreement shall be
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binding upon and inure to the benefit of the Company and the Trustee and their
respective successors and assigns.
Section 10.02 Nonalienation. Except insofar as applicable law
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may otherwise require:
(a) no amount payable to or in respect of any Participant at any
time under the Trust shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
charge or encumbrance of any kind, and any attempt to so alienate, sell,
transfer, assign, pledge, attach, charge or otherwise encumber any such
amount, whether presently or thereafter payable, shall be void; and
(b) the Trust Fund shall in no manner be liable for or subject to
the debts or liabilities of any Participant.
Section 10.03 Communications.
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(a) Communications to the Company shall be addressed to the
Company at P.O. Box 14662, Reading, PA 19612-4662, Attn. Treasurer, Carpenter
Technology Corporation, provided, however, that upon the Company's written
request, such communications shall be sent to such other address as the
Company may specify.
(b) Communications to the Trustee shall be addressed to its
Trusts and Estates Services Division, U.S. Private Banking, 1211 Avenue of the
Americas, 34th Floor, New York, New York 10036; provided, however, that upon
the Trustee's written request, such communications shall be sent to such other
address as the Trustee may specify.
(c) No communication shall be binding on the Trustee until it is
received by the Trustee, and no communication shall be binding on the Company
until it is received by the Company.
Section 10.04 Headings. Titles to the Sections of this Trust
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Agreement are included for convenience only and shall not control the meaning
or interpretation of any provision of this Trust Agreement.
Section 10.05 Third Parties. A third party dealing with the
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Trustee shall not be required to make inquiry as to the authority of the
Trustee to take any action nor be under any obligation to follow the proper
application by the Trustee of the proceeds of sale of any property sold by the
Trustee or to inquire into the validity or propriety of any act of the
Trustee.
Section 10.06 Governing Law. This Trust Agreement and the
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Trust established hereunder shall be governed by and construed, enforced, and
administered in accordance with the laws of the State of New York and the
Trustee shall be liable to account only in the courts of that state.
Section 10.07 Counterparts. This Trust Agreement may be
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executed in any number of counterparts, each of which shall be deemed to be
the original although the others shall not be produced.
Section 10.8 IRS Ruling - Funded Status. The Company intends
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to apply to the Internal Revenue Service for a ruling to the effect that this
Trust is a grantor trust within the meaning of section 671, et. seq. of the
Code and that contributions hereunder will not be treated as taxable income to
Plan Participants until distributed to those Participants. If the Company is
unable to obtain a satisfactory ruling to that effect, or if any Plan is
finally determined to be funded within the meaning of Title I of ERISA because
of the existence of this Trust and if a Change in Control has not then
occurred, the Company shall have the right, notwithstanding the provisions of
Article VIII, to further amend or revoke the Trust. If the Trust is revoked,
its assets, after deducting any unpaid fees or expenses due the Trustee, shall
be returned to the Company.
IN WITNESS WHEREOF, this Trust Agreement has been duly executed by
the parties hereto as of the day and year first above written.
Attest: CARPENTER TECHNOLOGY CORPORATION
By: s/John A. Schuler
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Treasurer
Attest: THE CHASE MANHATTAN BANK, N.A.
By: s/William P. Barbeosch
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TRUST3A.AGM
STATE OF )
)
COUNTY OF )
Personally appeared , of
, signer and sealer of the foregoing instrument, and
acknowledged the same to be his free act and deed as such
and the free act and deed of said company, before me.
Notary Public
STATE OF )
) ss.:
COUNTY OF )
Personally appeared , of
, signer and sealer of the foregoing instrument, and
acknowledged the same to be his free act and deed as such
and the free act and deed of said company, before me.
Notary Public
EXHIBIT "A"
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1. Deferred Compensation Plan For Nonmanagement Directors of Carpenter
Technology Corporation Effective January 1, 1983 Amended as of
December 13, 1984.
2. Carpenter Technology Corporation Director Retirement Plan Adopted June
9, 1983, Efffective August 1, 1981.
EXHIBIT "B"
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FORM OF NOTICE CONCERNING EARLY TAXATION
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I, the undersigned Participant (Beneficiary) under the Carpenter Technology
Corporation Non-Qualified Benefits Trust for Directors hereby notify The Chase
Manhattan Bank, N.A., as Trustee, that pursuant to Section 5.02(a) thereof, the
undersigned will recognize income for Federal income tax purposes due to funds
held in said Trust and request payment of all funds held in my account. I do
hereby certify the above to be a true statement and I hereby furnish the
following independent verification of the reasons why I will recognize income
for Federal income tax purposes:
[List below the type of independent verification and enclose a copy of
such verification.]