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EXHIBIT 10.31
THE HOWMET CORPORATION NONQUALIFIED DEFERRED
COMPENSATION TRUST
This Trust Agreement is made this 29th day of April, 1996 by and
between Howmet Corporation, a corporation with offices at 475 Steamboat Road,
Greenwich, Connecticut (the "Company") and Jeffrey A. Jankowski (the
"Trustee"). This Agreement is made with reference to the following:
A. The Company has adopted the Howmet Corporation Special 1995
Executive Deferred Compensation Plan (the "Plan") as a nonqualified deferred
compensation plan.
B. The Company wishes to establish a trust as a means for paying
benefits under the Plan, but wishes to have the trust assets remain subject to
the claims of the creditors of the Company so that the Plan will qualify as an
"unfunded" arrangement maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974
("ERISA").
NOW, THEREFORE, the parties hereby establish the Howmet Corporation
Nonqualified Deferred Compensation Trust which will be held and administered as
follows:
ARTICLE I
ESTABLISHMENT OF TRUST
1.1 Company hereby deposits with Trustee $2,451,554.93 which will
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.
1.2 The Trust hereby established will be irrevocable.
1.3 The Trust is intended to be a grantor trust, of which Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and will be
construed accordingly.
1.4 The assets of the Trust will be used exclusively for the uses
and purposes of Plan participants and general creditors as herein set forth.
Plan participants and their beneficiaries will have no preferred claim on, or
any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement will be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3.1.
1.5 Company may make additional deposits of cash or other property
in trust with Trustee to augment the principal to be held, administered and
disposed of by Trustee as provided in this Trust Agreement.
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ARTICLE II
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
2.1 Company will deliver to Trustee from time to time written
instructions concerning payment of benefits from the Trust to or in respect of
Plan participants. Except as otherwise provided herein, Trustee will make
payments to the Plan participants and their beneficiaries in accordance with
such instructions. The Trustee will make provision for the reporting and
withholding of any federal state or local taxes that may be required to be
withheld with respect to payments to plan participants or and beneficiaries,
and will pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid by Company.
2.2 The entitlement of a Plan participant or beneficiary to benefits
under the Plan will be determined by Company or such party as it shall
designate under the Plan and any claim for benefits will be considered and
reviewed under the procedures set out in the Plan.
2.3 Company may make payment of benefits directly to Plan participants
or beneficiaries as they become due under the terms of the Plan. Company will
notify Trustee of its decision to make payment of benefits directly prior to
the time amounts are payable to participants or their beneficiaries. In
addition, if the assets of the Trust are not sufficient to make payments of
benefits, Trustee will notify Company and Company will make the balance of each
such payment as it falls due.
ARTICLE III
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
WHEN COMPANY IS INSOLVENT
3.1 Trustee will cease payment of benefits to Plan participants and
their beneficiaries if the Company is Insolvent. Company will be considered
"Insolvent" for purposes of this Trust Agreement if Company is unable to pay
its debts as they become due, or Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
3.2 The assets of the Trust will be subject to claims of general
creditors of Company under federal and state law as set forth below.
a. The Chief Executive Officer of Company will inform Trustee in
writing of Company's Insolvency. If a person claiming to be a creditor
of Company alleges in writing to Trustee that Company has become
Insolvent, Trustee will determine whether Company is Insolvent and,
pending such determination, Trustee will discontinue payment of benefits
to Plan participants or their beneficiaries.
b. Unless Trustee has actual knowledge of Company's Insolvency,
or has received notice from Company or a person claiming to be a
creditor alleging that Company is Insolvent, Trustee will have no duty
to inquire whether Company is Insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be furnished to
Trustee and that provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
c. If at any time Trustee has determined that Company is
Insolvent, Trustee will discontinue payments to Plan participants or
their beneficiaries and will hold the assets of the
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Trust for the benefit of Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of Plan participants
or their beneficiaries to pursue their rights as general creditors of
Company with respect to benefits due under the Plan or otherwise.
d. Trustee will resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Article II of this
Trust Agreement only after Trustee has determined that Company is not or
is no longer Insolvent.
3.3 If the Trustee discontinues the payment of benefits and
subsequently resumes payments, the next payment following such discontinuance
will include the amount of all payments due to Plan participants and
beneficiaries for the period of discontinuance, less the aggregate amount of
any payments made by the Company in lieu of payments provided for hereunder
during the period of discontinuance of payments from the Trust.
ARTICLE IV
PAYMENTS TO COMPANY
Except as provided in Article III hereof, Company will have no right or
power to direct Trustee to return to Company or to divert to others any of the
Trust assets until all payment of benefits have been made to Plan participants
and their beneficiaries pursuant to the term of the Plan.
ARTICLE V
POWERS AND DUTIES OF TRUST
5.1 General Powers. The Trustee will manage and control the assets
of the Trust as directed by the Company. The Trustee will not have any
investment authority and will not be liable for any losses incurred as a result
of investments made in accordance with the written directions of the Company.
5.2 Payments by Trustee. The Trustee will pay benefits from the
Trust to or for the account of participants or beneficiaries in the amount and
manner, and at such time and addresses, as directed in writing by the Company.
The Trustee will make such other payments as directed in writing by the Company.
5.3 Accounts and Records. The Trustee will keep accurate and
detailed records of the Trust. The fiscal year of the Trust will be the year
adopted by the Company for federal income tax purposes unless another year is
agreed upon between the Company and the Trustee. Within 60 days following the
close of each fiscal year of the Trust and within 60 days after the removal or
resignation of Trustee, Trustee shall deliver to Company a written account of
its administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
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5.4 Reporting. The Trustee will, within the time prescribed by law,
file with the Internal Revenue Service and with other appropriate regulatory
agencies any reports or statements which by law are required to be filed by it.
The Trustee will have no responsibility for the preparation or filing of any
reports, returns, or documents required by law to be filed by the Company other
than those explicitly agreed upon in writing by the Trustee and the Company.
5.5 Miscellaneous. The Trustee will not be responsible for enforcing
payment of or collecting any contribution to be made by the Company or any
participant or enforcing payment of or collecting any funds held by the Company
on behalf of participants for the purpose of making contribution to the Plan.
ARTICLE VI
INVESTMENT OF THE TRUST
6.1 General Investment Powers. The Trustee will invest and reinvest
the principal and income of the Trust as directed by the Company, and will not
make any distinction between principal and income. The Trustee will not be
required to determine whether the investments chosen by the Company would
otherwise be permissible for the investment of Trust Funds under any present or
future laws.
6.2 Specific Investment Powers. The Trustee is authorized and
empowered as follows:
a. to vote in person or by proxy any stocks, bonds, or other
securities held by it; to exercise any options available to any stocks,
bonds, or other securities; to exercise any rights to subscribe for
additional stocks, bonds, or other securities, and to make necessary
payments for such rights; and to join in or oppose any reorganization,
recapitalization, consolidation, or merger.
b. to make, execute, acknowledge, and deliver deeds, leases,
assignments, documents of transfer, and other instruments that may be
necessary to carry out the powers granted by this Agreement;
c. to enforce any right, obligation, or claim in its absolute
discretion and, in general to protect in any way the interest of the
Trust, either before or after default, and in its absolute discretion to
abstain from the enforcement of any right obligation, or claim and to
abandon any property, whether real or personal which at any time may be
held by it;
d. to cause any investments in the Trust to be registered in or
transferred into its name or the name of its nominee or nominees or to
retain them unregistered or in form permitting transfer by delivery, but
the books and records of the Trustee will at all times show that all
such investments are part of the Trust;
e. to apply for, purchase, hold, or transfer, in accordance with
written instructions from the Company, annuity contracts by which the
Company may choose to provide benefits;
f. to do all other acts and to exercise any other powers which it
may deem necessary and proper to carry out its duties as Trustee under
this Trust Agreement.
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ARTICLE VII
RESPONSIBILITY OF TRUSTEE
7.1 Trustee will act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided however, that
Trustee will incur no liability to any person for any action taken pursuant to
a direction, request or approval given by Company which is contemplated by, and
in conformity with, the terms of the Plan or this Trust and is given in writing
by Company. In the event of a dispute between Company and a party, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
7.2 If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in
a reasonably timely manner, Trustee may obtain payment from the Trust.
7.3 Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or obligations
hereunder.
7.4 Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
7.5 Trustee will have all powers conferred on Trustees by
applicable law, unless expressly provided otherwise herein, provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee will have
no power to name a beneficiary of the policy other than the Trust, to assign
the policy (as distinct from conversion of the policy to a different form)
other than to a successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
7.6 Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
ARTICLE VIII
COMPENSATION AND EXPENSES OF TRUSTEE
Company will pay all administrative and Trustee's fees and expenses. If
not so paid, the fees and expenses will be paid from the Trust.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.1 Trustee may resign at any time by written notice to Company,
which will be effective 60 days after receipt of such notice unless Company and
Trustee agree otherwise.
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9.2 Trustee may be removed by Company on 60 days notice or upon shorter
notice accepted by Trustee.
9.3 Upon registration or removal of Trustee and appointment of a
successor Trustee, all assets will subsequently be transferred to the successor
Trustee. The transfer will be completed within 60 days after receipt of notice
of resignation, removal or transfer, unless Company extends the time limit.
9.4 If Trustee resigns or is removed, the Company will appoint a
successor trustee by the effective date of the resignation or removal. If no
such appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses
of Trustee in connection with the proceeding will be allowed as administrative
expenses of the Trust.
9.5 If Trustee resigns or is removed in accordance with Section 8.1 or
8.2 hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or the successor Trustee
to evidence the transfer.
9.6 The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Articles V and VII hereof. The successor Trustee shall not be responsible for,
and Company shall indemnify and defend the successor Trustee from, any claim or
liability resulting from any action or inaction of any prior Trustee or from
any other past event, or any condition existing at the time it becomes
successor Trustee.
ARTICLE X
AMENDMENT OR TERMINATION
10.1 This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment will conflict with the terms of the Plan or make the Trust revocable.
10.2 The Trust will not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan. Upon termination of the Trust any assets
remaining in the Trust will be returned to Company.
ARTICLE XI
MISCELLANEOUS
11.1 Any provision of this Trust Agreement prohibited by law will be
ineffective to the extent of any such prohibition, without invalidating the
remain provisions.
11.2 Benefits payable to Plan participants and their beneficiaries
under this Trust
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Agreement may not be anticipated, assigned, alienated, pledged, encumbered or
subjected to attachment, garnishment, levy, execution or other legal or
equitable process.
11.3 This Trust Agreement will be governed by and construed in
accordance with the laws of the State of New York.
11.4 The effective date of this Trust Agreement shall be April 30,
1996.
HOWMET CORPORATION
By: /s/ D. L. Squier
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Its President
TRUSTEE
/s/ Jeffrey A. Jankowski
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Jeffrey A. Jankowski
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