EXHIBIT 10.31
HOWMET CORPORATION
SECOND AMENDED AND RESTATED SPECIAL 1995 EXECUTIVE DEFERRED
COMPENSATION PLAN
This Special 1995 Executive Deferred Compensation Plan (the "Plan") was
adopted by Howmet Corporation (the "Employer") on November 1, 1995 to provide a
program for deferring compensation by a select group of management employees.
This Plan is maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and is not intended
to comply with the requirements of Section 401(a) of the Internal Revenue Code.
The Plan is intended to be exempt from most of the requirements of ERISA. In
order to amend the Plan in certain respects, effective as of November 24, 1997,
the Employer has adopted the Second Amended and Restated Howmet Corporation
Special 1995 Executive Deferred Compensation Plan.
ARTICLE I
PURPOSE
The purpose of the Plan is to provide designated employees the
opportunity to (1) defer current federal income taxes on their incentive
compensation awards, (2) to have such deferred amounts grow at rates reflecting
the growth of the Employer and other investments and (3) to defer current
federal income taxes on the earnings from such investments until future payout
dates selected by the participants.
ARTICLE II
DEFINITIONS
For the purposes of this Plan the following words and phrases shall have
the meanings indicated, unless the context clearly indicates otherwise:
2.1 Administrator. "Administrator" means the Employer, acting through the
Board or its delegates. The Administrator shall have all duties and
responsibilities imposed by ERISA.
2.2 Affiliate. "Affiliate" means any employer which, at the time of reference,
was, with the Employer, a member of a controlled group of corporations or trades
or businesses under common control, or a member of an affiliated service group,
as determined under regulations issued by the Secretary of the Treasury or his
delegate under Code Sections 414(b), (c), (m) and 415(h) and any other entity
required to be aggregated with the Employer pursuant to regulations issued under
Code Section 414(o).
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2.3 Beneficiary. "Beneficiary" means the person, persons or entity designated
by the Participant, or as provided in Article VII, to receive any death benefits
payable under the Plan. Any beneficiary designation shall be made in a written
instrument filed with the Administrator.
2.4 Board. "Board" means the Board of Directors of the Employer.
2.5 Carlyle-Blade. "Carlyle-Blade" means Carlyle-Blade Acquisition Partners,
L.P., a Delaware limited partnership.
2.6 Code. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.7 Deferred Compensation. "Deferred Compensation" means the amount of
Incentive Compensation deferred by a Participant pursuant to this Plan, net of
any amount the Employer is required to withhold pursuant to any federal, state
or local law.
2.8 Deferred Compensation Account. "Deferred Compensation Account" means the
account maintained on the books of the Employer for each Participant pursuant to
Article V.
2.9 Determination Date. "Determination Date" means the date as of which the
value of a Participant's Deferred Compensation Account is determined as provided
in Article V hereof. The first Determination Date will be December 31, 1995 and
the second Determination Date will be the date on which occurs a Distribution
Upon Liquidation; provided, that the Administrator in its discretion, may select
any date as an additional Determination Date.
2.10 Distribution Upon Liquidation. "Distribution Upon Liquidation" means a
distribution to partners of Carlyle-Blade upon liquidation of Carlyle-Blade in
accordance with the provisions of Article 9 (or any successor provision thereto)
of the Partnership Agreement.
2.11 Employer. "Employer" means Howmet Corporation and any successor to the
business thereof.
2.12 Incentive Compensation. "Incentive Compensation" means the amount payable
to the Participant pursuant to the Special Incentive Compensation Plan.
2.13 Non-Liquidation Distribution. "Non-Liquidation Distribution" means any
distribution to partners of Carlyle-Blade other than a Distribution upon
Liquidation.
2.14 Participant. "Participant" means any employee who is a participant in the
Special Incentive Compensation Plan and who files a Participation Agreement as
provided in Article IV.
2.15 Participation Agreement. "Participation Agreement" means an agreement
filed with the Administrator by a Participant on or before November 10, 1995
pursuant to which Incentive Compensation is to be deferred pursuant to the Plan,
as amended in accordance with the Plan.
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2. 16 Partnership Agreement. "Partnership Agreement" means the Limited
Partnership Agreement of Carlyle-Blade, dated as of December 13, 1995, as
amended.
2.17 Plan. "Plan" means the Howmet Corporation Special 1995 Executive Deferred
Compensation Plan, as amended.
2.18 Rules of the Plan. "Rules of the Plan" means the rules adopted by the
Administrator pursuant to Section 3.2 for the administration, interpretation or
application of the Plan.
2.19 Special Incentive Compensation Plan. "Special Incentive Compensation
Plan" means the Special Incentive Compensation Plan announced by the Employer on
June 6, 1995.
2.20 Spouse. "Spouse" with respect to a Participant means such Participant's
wife or husband who is lawfully married to the Participant immediately prior to
the distribution of such Participant's Deferred Compensation Account under this
Plan.
2.21 Termination. "Termination" with respect to a Participant means such
Participant's severance from service with the Employer and all Affiliates of the
Employer. A transfer of service among the Employer and Affiliates will not
constitute a Termination for purposes of this Plan.
ARTICLE III
ADMINISTRATION
3.1 Duties of the Board. This plan shall be administered by the Board.
Members of the Board may be Participants under this Plan. No member of the
Board may act, vote or otherwise influence a decision of the Board specifically
relating to his own participation in the Plan.
3.2 Administrator's Duties and Powers.
(a) The Administrator shall conduct the general administration of the
Plan in accordance with the Plan and shall have all the necessary power and
authority to carry out that function. Among its necessary powers and duties, are
the following:
(i) To delegate all or part of its function as Administrator to
others and to revoke any such delegation.
(ii) To determine questions of eligibility of Participants and their
entitlement to benefits.
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(iii) To select and engage attorneys, accountants, actuaries, trustees,
appraisers, brokers, consultants, administrators, physicians or other
persons to render service or advice with regard to any responsibility the
Administrator has under the Plan, or otherwise, to designate such persons
to carry out responsibilities, and (with the Employer, the Board and its
officers, trustees and employees) to rely upon the advice, opinions or
valuations of any such persons, to the extent permitted by law, being fully
protected in acting or relying thereon in good faith.
(iv) To interpret the Plan for purpose of the administration and
application of the Plan, in a manner not inconsistent with the Plan or
applicable law and to amend or revoke any such interpretation.
(v) To adopt Rules of the Plan that are not inconsistent with the
Plan or applicable law and to amend or revoke any such rules.
(vi) To determine the form of distribution of Deferred Compensation
Accounts pursuant to Article VI.
(b) Every finding, decision, and determination made by the
Administrator shall, to the full extent permitted by law, be final and binding
upon all parties, except to the extent found by a court of competent
jurisdiction to constitute an abuse of discretion.
3.3 Limitations Upon Powers. The Plan shall be uniformly and consistently
administered, interpreted and applied with regard to all Participants in similar
circumstances. The Plan shall be administered, interpreted and applied fairly
and equitably and in accordance with the specified purposes of the Plan.
3.4 Indemnification by the Employer; Liability Insurance.
(a) The Employer shall pay or reimburse any of the Employer's officers,
directors or employees who administer the Plan for all expenses incurred by such
persons in, and shall indemnify and hold them harmless from, all claims,
liability and costs (including reasonable attorneys' fees) arising out of the
good faith performance of their Plan functions.
(b) The Employer may obtain and provide for any such person, at the
Employer's expense, liability insurance against liabilities imposed on him by
law.
3.5 Recordkeeping.
(a) The Administrator shall maintain suitable records as follows:
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(i) Records of each Participant's individual Deferred
Compensation Account which, among other things, shall show separately
deferrals and the gains and losses thereon.
(ii) Records which show the operations of the Plan during each
Plan Year.
(iii) Records of its deliberations and decisions.
(b) The Administrator may appoint a secretary to keep the record of
proceedings, to transmit its decisions, instructions, consents or directions to
any interested party, to execute and file, on behalf of the Administrator, such
documents, reports or other matters as may be necessary or appropriate under
ERISA and to perform ministerial acts.
(c) The Administrator shall not be required to maintain any records
or accounts which duplicate any records or accounts maintained by the Employer.
3.6 Inspection of Records. Copies of the Plan and records of a Participant's
Deferred Compensation Account shall be open to inspection by him or his duly
authorized representatives at the office of the Employer at any reasonable
business hour.
3.7 Conflicting Claims. If the Administrator is confronted with conflicting
claims concerning a Participant's Deferred Compensation Account, the
Administrator may interplead the claimants in an action at law, or in an
arbitration conducted in accordance with the rules of the American Arbitration
Association, as the Administrator shall elect in its sole discretion, and in
either case, the attorneys' fees, expenses and costs reasonably incurred by the
Administrator in such proceeding shall be paid from the Participant's Deferred
Compensation Account.
3.8 Service of Process. The Secretary of the Employer is hereby designated as
agent of the Plan for the service of legal process.
3.9 Service in More than One Capacity. Any person or group of persons may
serve in more than one capacity with respect to the Plan.
ARTICLE IV
PARTICIPATION
4.1 Eligibility. All employees of the Employer who file U.S. income tax
returns and who are eligible to participate in the Special Incentive
Compensation Plan will be eligible to participate in this Plan.
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4.2 Participation. Participation in the Plan shall be limited to eligible
employees who file a Participation Agreement on or before November 10, 1995.
The election to participate shall be effective upon receipt by the Administrator
of a duly executed Participation Agreement.
4.3 Deferred Compensation. Provided that the amount deferred is not less than
$1,000, each Participant may elect to defer receipt of all or any percentage of
his Incentive Compensation until a date specified by the Participant, which may
in no event be later than the occurrence of a Distribution Upon Liquidation.
The Participant's Deferred Compensation will be deducted from the Incentive
Compensation otherwise payable to the Participant pursuant to the Special
Incentive Compensation Plan.
4.4 Irrevocability. The election to defer Incentive Compensation pursuant to a
Participation Agreement filed with the Administrator is irrevocable and may not
be amended except to the extent required, in the discretion of the Board, to
reflect the amendment and restatement of the Plan; provided, that the Board, in
its discretion, may permit further amendment.
4.5 Participation Agreement. The Participant shall set forth on the
Participation Agreement:
(a) his consent that he, his successors in interest and assigns and all
persons claiming under him shall be bound, to the extent authorized by law, by
the statements contained therein and by the provisions of the Plan as they now
exist, and as they may be amended from time to time,
(b) the percentage or specified dollar amount of his Incentive Compensation
to be deferred and the date as of which distribution of his Deferred
Compensation Account shall be made,
(c) his consent to the Administrator's discretion to choose the form of
property (which may include cash and other property as selected by the
Administrator in its discretion) in which such distribution shall be made, and
(d) such other information as may be required for the administration of the
Plan. Such Participation Agreement shall be in the form specified by the
Administrator.
ARTICLE V
DEFERRED COMPENSATION ACCOUNTS
5.1 Establishment of Deferred Compensation Account. The Administrator shall
establish and maintain for each Participant a Deferred Compensation Account to
which shall be credited the
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amounts determined under Section 5.2, debited amounts distributed therefrom
pursuant to Article VI and credited or debited the amounts determined under
Section 5.3.
5.2 Deferred Compensation. The amount of Incentive Compensation that a
Participant elects to defer in the Participation Agreement, net of any amount
the Employer is required to withhold pursuant to any federal, state, or local
law, shall be credited by the Employer to the Participant's Deferred
Compensation Account on the first day of the month following the date as of
which such Incentive Compensation was eligible to be paid.
5.3 Investment Credits and Debits. On each Determination Date after December
31, 1995, additional amounts shall be credited (or debited) to each
Participant's Deferred Compensation Account, such amounts to be equal to the
earnings (or losses) that would have been credited (or debited) had such
Participant's Deferred Compensation Account been applied in its entirety to
purchase the interest of a "Limited Partner" of Carlyle-Blade (as defined in the
Partnership Agreement) for the period between successive Determination Dates.
5.4 Determination of Account Value. As of each Determination Date, the
Administrator shall determine, in good faith, the fair market value of each
Participant's Deferred Compensation Account based upon such information as the
Administrator deems appropriate and which is reasonably available to the
Administrator including appraisals by qualified persons, transactions and bona
fide offers in assets of the type in question, data from newspapers and
financial publications of general circulation, statistical and valuation
services, records of securities exchanges, and other information customarily
used in the valuation of property for the purposes of the Code. With respect to
securities for which there is a generally recognized market, the published
selling prices on or nearest to such Determination Date shall establish fair
market value of such security. Fair market value so determined shall be
conclusive for all purposes of the Plan.
5.5 Applicability of Account Values. The value of a Deferred Compensation
Account as determined as of a given date under this Article less any amounts
subsequently distributed under Article VI, shall remain the value thereof for
all purposes of the Plan until revalued hereunder.
5.6 Vesting of Deferred Compensation Account. A Participant shall always be
100 % vested in the value of his Deferred Compensation Account.
5.7 Statement of Accounts. The Administrator shall submit to each Participant
after each Determination Date a statement setting forth the balance to the
credit of such Participant in his Deferred Compensation Account as of the
Determination Date.
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ARTICLE VI
DISTRIBUTION OF ACCOUNTS
6.1 Distribution Election. Subject to Sections 6.2 and 6.3, the value of each
Participant's Deferred Compensation Account shall be distributed to him or her
in one lump sum payment within 30 days after the date selected by the
Participant in the Participation Agreement.
6.2 Non-Liquidation Distributions. Notwithstanding any Participant's deferral
election or any other provisions of this Plan to the contrary, the Administrator
shall distribute to each Participant, no earlier than the day of, and no later
than 60 days after the end of each calendar year in which occurs, any Non-
Liquidating Distribution, an amount equal to such Non-Liquidation Distribution
(net of any amount the Employer is required to withhold pursuant to any federal,
state or local law) that would have been credited to such Participant's Deferred
Compensation Account had such Deferred Compensation Account been applied in its
entirety to purchase the interest of a "Limited Partner" of Carlyle-Blade (as
defined in the Partnership Agreement) for the period since the last
Determination Date; provided, however, that such distributions shall be made at
such time as is necessary to entitle the Employer to the applicable federal
income tax deduction for the year to which the Non-Liquidation Distribution
relates.
6.3 Form of Distribution. Any distribution from a Participant's Deferred
Compensation Account which is made on the day of, and in connection with, a Non-
Liquidating Distribution, shall be made in the form of units in Howmet Executive
Compensation Partners, L.P. ("HECP"). In all other events, distribution of the
value of each Participant's Deferred Compensation Account shall be made in cash
(or, if so determined by the Administrator, in other property including, without
limitation, distribution of the interest of a "Limited Partner" of Carlyle-
Blade, to the extent permitted by the Partnership Agreement or distribution of
units of HECP.).
6.4 Adjustments for Taxes. Any distributions made from a Participant's
Deferred Compensation Account will be subject to appropriate arrangements for
the payment of any applicable withholding required pursuant to any federal,
state or local law.
ARTICLE VII
BENEFICIARY DESIGNATION
7.1 Beneficiary Designation. Each Participant may designate any person,
persons, or entity as his Beneficiary or Beneficiaries to whom payment of the
value of his Deferred Compensation Account shall be made in the event of his
death. Any Beneficiary designation may be made or
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changed by a Participant by filing a beneficiary designation form prescribed by
the Administrator. The filing of a new Beneficiary designation form will cancel
all Beneficiary designations previously filed.
7.2 Marital Status. If a Participant's Deferred Compensation Account is
community property under applicable state law, no Beneficiary designation shall
be valid or effective if any such Beneficiary (or combination thereof) other
than the Participant's Spouse, if any, is to receive more than 50 percent of
such Participant's Deferred Compensation Account unless the Spouse shall, in
writing, approve the designation.
7.3 No Participant Designation. If a Participant fails to designate a
Beneficiary as provided above, or if his Beneficiary designation is revoked by
operation of law or otherwise without execution of a new designation, or if all
designated Beneficiaries predecease the Participant, then the Participant's
Beneficiary shall be his estate.
ARTICLE VIII
AMENDMENT AND TERMINATION OF PLAN
8.1 Amendment. The Employer may at any time amend the Plan in whole or in part,
provided however, that no amendment shall decrease the balance to the credit of
any Deferred Compensation Account as of the date of such amendment.
8.2 Employer's Right to Terminate. The Employer may at any time terminate the
Plan. Upon termination of the Plan, the Employer may discharge in full its
obligations to any participant upon payment of the Participant's Deferred
Compensation Account balance as of the date of such termination.
ARTICLE IX
GENERAL PROVISIONS
9.1 Creditors of the Employer. The Employer may establish a trust to provide a
source of funding its obligations under this Plan, but the assets of the trust
will remain subject to the claims of the creditors of the Employer.
9.2 Nonassignability. Neither a Participant nor any other person shall have
any right to sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, hypothecate or convey in advance of actual receipt, the amounts
payable hereunder.
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9.3 Not a Contract of Employment. The terms and conditions of this Plan and
any Participation Agreement shall not be deemed to constitute a contract of
employment with the Employer, and the Participant (or his Beneficiary) shall
have no rights against the Employer except as may be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of the Employer or to interfere with the
right of the Employer to discipline or discharge him at any time for any reason
whatsoever.
9.4 Protective Provisions. A Participant will cooperate with the Employer and
Administrator by furnishing any and all information requested by the Employer or
the Administrator in order to facilitate the payment of benefits hereunder, and
by taking such other action as may be requested by the Employer or the
Administrator.
9.5 Terms. Whenever any words are used herein in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or in the
singular, as the case may be, in all cases where they would so apply.
9.6 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
9.7 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of New York.
9.8 Validity. In case any provision of this Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof but this Plan shall be construed and enforced as if such illegal
and invalid provision had never been inserted herein.
9.9 Notice. Any notice or filing required or permitted to be given to the
Administrator under this Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the Administrator at the
executive office of the Employer. Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
9.10 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Employer and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Employer, and successors of
any such corporation or other business entity.
9.11 Incompetency. In the event that it shall be found upon evidence
satisfactory to the Administrator that any Participant or Beneficiary to whom a
benefit is payable under this Plan
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is unable to care for his affairs because of illness or accident, any payment
due (unless prior claim therefor shall have been made by a duly authorized
guardian or other legal representative) may be paid, upon appropriate
indemnification of the Employer and Administrator, to the Spouse or other person
deemed by the Administrator to have incurred expense for such Participant (or
Beneficiary). Any such payment shall be a payment for the account of the
Participant and shall be a complete discharge of any liability of the Plan and
the Employer with respect to the amount so paid.
ARTICLE X
CLAIMS PROCEDURE
10.1 Claim. Any person claiming a benefit or requesting an interpretation or
ruling under the Plan shall present the request in writing to the Administrator
which shall respond in writing as soon as practicable.
10.2 Denial of Claim. If the claim or request is denied, the written notice of
denial shall state:
(a) The reason for denial with specific reference to the Plan provisions on
which the denial was based.
(b) A description of any additional material or information required and an
explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
10.3 Review of Claim. Any person whose claim or request is denied or who has
not received a response within 60 days may request review by notice given in
writing to the Administrator. The claim or request shall be reviewed by the
Administrator which may grant the claimant a hearing or request a hearing to
clarify any related matters which it deems appropriate. On review, the claimant
may have representation, examine pertinent documents, and submit issues and
comments in writing.
10.4 Final Decision. The decision on review shall normally be made by the
Administrator within 60 days of the date of the review of claim authorized by
10.3. If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be 120
days. The decision shall be in writing and shall state the reason and the
relevant Plan provisions.
10.5 Arbitration. Any claim or dispute arising hereunder which is not resolved
upon conclusion of the procedures heretofore provided in this Article X shall,
upon request of either
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the Employer or the claiming or requesting person, be decided by arbitration in
the metropolitan area where the Participant is, or was most recently, employed
by the Employer, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The award rendered in such arbitration shall
be final, and judgment on such award may be entered in any court, state or
federal having jurisdiction thereover. In no event however, should the
arbitrator be given authority to judge any decision which is the subject of the
Administrator's exercise of its discretion in accordance with the terms of this
Plan.
IN WITNESS WHEREOF, the Employer has caused this Second Amended and Restated
Plan to be executed on this 24th day of November, 1997.
HOWMET CORPORATION
By: /s/ Roland A. Paul
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Its: Vice President - General Counsel
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