MASTER TRUST AGREEMENT

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Exhibit 10.6

HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

Effective January 1, 2003

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

MASTER TRUST AGREEMENT

TABLE OF CONTENTS

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ARTICLE 1 Name, Intentions, Irrevocability, Deposit and Definitions...................................1

1.1. Name........................................................................................1

1.2. Intentions..................................................................................1

1.3. Irrevocability; Creditor Claims.............................................................1

1.4. Initial Deposit.............................................................................2

1.5. Additional Definitions......................................................................2

1.6. Grantor Trust...............................................................................3

ARTICLE 2 General Administration......................................................................4

2.1. Committee Directions and Administration Before Change in Control............................4

2.2. Administration Upon Change in Control.......................................................4

2.3. Contributions...............................................................................4

2.4. Trust Fund..................................................................................5

2.5. Distribution of Excess Trust Fund to Employers..............................................5

ARTICLE 3 Powers and Duties of Trustee................................................................5

3.1. Investment Directions.......................................................................5

3.2. Investment Upon Change in Control...........................................................5

3.3. Management of Investments...................................................................6

3.4. Securities..................................................................................8

3.5. Substitution................................................................................8

3.6. Distributions...............................................................................8

3.7. Trustee Responsibility Regarding Payments on Insolvency....................................11

3.8. Costs of Administration....................................................................13

3.9. Trustee Compensation and Expenses..........................................................13

3.10. Professional Advice........................................................................13

3.11. Payment on Court Order.....................................................................13

3.12. Protective Provisions......................................................................14

3.13. Indemnifications...........................................................................14

ARTICLE 4 Insurance Contracts........................................................................15

4.1. Types of Contracts.........................................................................15

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

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4.2. Ownership..................................................................................15

4.3. Restrictions on Trustee's Rights...........................................................15

ARTICLE 5 Trustee's Accounts.........................................................................15

5.1. Records....................................................................................15

5.2. Annual Accounting; Final Accounting........................................................16

5.3. Valuation..................................................................................16

5.4. Delegation of Duties.......................................................................17

ARTICLE 6 Resignation or Removal of Trustee..........................................................17

6.1. Resignation; Removal.......................................................................17

6.2. Successor Trustee..........................................................................17

6.3. Settlement of Accounts.....................................................................17

ARTICLE 7 Controversies, Legal Actions and Counsel...................................................18

7.1. Controversy................................................................................18

7.2. Joinder of Parties.........................................................................18

7.3. Employment of Counsel......................................................................18

ARTICLE 8 Insurers...................................................................................18

8.1. Insurer Not a Party........................................................................18

8.2. Authority of Trustee.......................................................................18

8.3. Contract Ownership.........................................................................18

8.4. Limitation of Liability....................................................................19

8.5. Change of Trustee..........................................................................19

ARTICLE 9 Amendment and Termination..................................................................19

9.1. Amendment..................................................................................19

9.2. Final Termination..........................................................................20

ARTICLE 10 Miscellaneous..............................................................................20

10.1. Directions Following Change in Control.....................................................20

10.2. Taxes......................................................................................21

10.3. Third Persons..............................................................................21

10.4. Nonassignability; Nonalienation............................................................21

10.5. Applicable Law.............................................................................21

10.6. Notices and Directions.....................................................................21

10.7. Successors and Assigns.....................................................................21

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

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10.8. Gender and Number..........................................................................22

10.9. Headings...................................................................................22

10.10. Counterparts...............................................................................22

10.11. Beneficial Interest........................................................................22

10.12. The Trust and Plans........................................................................22

10.13. Effective Date.............................................................................22

Exhibit A Plans......................................................................................23

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

MASTER TRUST AGREEMENT

FOR

HAYNES INTERNATIONAL, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN(S)

THIS MASTER TRUST AGREEMENT ("Master Trust Agreement") is made and

entered into as of January 13, 2003, between Haynes International, Inc., a

Delaware corporation (the "Company"), and Legacy Trust Company, Inc., a Florida

corporation (the "Trustee"), to evidence the master trust (the "Trust") to be

established, pursuant to those executive deferral plans or other arrangements of

the Company listed in Exhibit A (the "Plans") now or hereafter existing that

require the establishment of a trust, for the benefit of a select group of

management or highly compensated employees and/or Directors, as hereinafter

defined, who contribute materially to the continued growth, development and

business success of the Company and those subsidiaries of the Company, if any,

that participate in the Plans (collectively, "Subsidiaries," or singularly,

"Subsidiary").

ARTICLE 1

NAME, INTENTIONS, IRREVOCABILITY,

DEPOSIT AND DEFINITIONS

1.1. NAME. The name of the Trust created by this Agreement (the "Trust")

shall be:

MASTER TRUST AGREEMENT FOR

HAYNES NTERNATIONAL, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN(S)

1.2. INTENTIONS. The Company wishes to establish the Trust and to contribute

to the Trust assets that shall be held therein, subject to the claims of

the Company's and the Subsidiaries' creditors in the event of their

Insolvency (as defined below) until paid to Participants, as hereinafter

defined, and their Beneficiaries, as hereinafter defined, in such manner

and at such times as specified in the Plans, as hereinafter defined. It

is the intention of the parties that this Trust shall constitute an

unfunded arrangement and shall not affect the status of the Plans as

unfunded plans maintained for the purpose of providing supplemental

compensation for a select group of management or highly compensated

employees and/or Directors for purposes of Title I of ERISA (as defined

below). In addition, it is the intention of the Company and the

Subsidiaries to make contributions to the Trust to provide themselves

with a source of funds to assist them in the meeting of their

liabilities under the Plans.

1.3. IRREVOCABILITY; CREDITOR CLAIMS. The Trust hereby established shall be

irrevocable. Except as otherwise provided in Sections 2.5 and 9.2, the

principal of the Trust, and any earnings thereon,

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

shall be held separate and apart from other finds of the Company and the

Subsidiaries and shall be used exclusively for the uses and purposes of

the Participants and the general creditors of the Company and the

Subsidiaries as herein set forth. The Participants and their

Beneficiaries shall have no preferred claim on, or any beneficial

ownership interest in, any assets of the Trust. Any rights created under

the Plans and this Master Trust Agreement shall be mere unsecured

contractual rights of the Participants and their Beneficiaries against

the Company and the Subsidiaries. Any assets held by the Trust will be

subject to the claims of the Company's and the Subsidiaries' general

creditors under federal and state law in the event of Insolvency.

1.4. INITIAL DEPOSIT. The Company hereby deposits with the Trustee in trust

$100, which shall become the principal of the Trust to be held,

administered and disposed of by the Trustee as provided in this Master

Trust Agreement

1.5. ADDITIONAL DEFINITIONS. In addition to the definitions set forth above,

for purposes hereof, unless otherwise clearly apparent from the context,

the following terms have the following indicated meanings:

(a) "Beneficiary" shall mean one or more persons, trusts, estates or

other entities, designated in accordance with a Plan, that are

entitled to receive benefits under a Plan upon the death of a

Participant.

(b) "Board" shall mean the board of directors of the Company.

(c) "Change in Control" shall be deemed to occur if.

(i) Any "person" (as that term is used in Section 13 and

14(d)(2) of the Securities Exchange Act of 1934

("Exchange Act")) becomes the beneficial owner (as that

term is used in Section 13(d) of the Exchange Act),

directly or indirectly, of fifty percent (50%) or more

of the Company's capital stock entitled to vote in the

election of Directors;

(ii) During any period of not more than two consecutive

years, not including any period prior to the adoption of

this Plan, 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 clause (i), (iii), (iv) or (v)

of this Section 1.5(c)) whose election by the board of

directors or nomination for election by the Company's

stockholders was approved by a vote of at least

three-fourths (3/4ths) 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 at least a majority thereof;

(iii) The shareholders of the Company approve any

consolidation or merger of the Company, other than a

consolidation or merger of the Company in which the

holders of the common stock of the Company immediately

prior to the

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

consolidation or merger hold more than fifty (50%) of

the common stock of the surviving corporation

immediately after the consolidation or merger;

(iv) The shareholders of the Company approve any plan or

proposal for the liquidation or dissolution of the

Company, or

(v) The shareholders of the Company approve the sale or

transfer of all or substantially all of the assets of

the Company to parties that are not within a "controlled

group of corporations" (as defined in Code Section 1563)

in which the Company is a member.

(d) "Committee" shall mean the Retirement Committee appointed by the

Board to administer this Trust.

(e) "Director" shall mean any member of the Board of Directors of

the Company or any Subsidiary.

(f) "ERISA" shall mean the Employee Retirement Income Security Act

of 1974, as it may be amended from time to time.

(g) "Insolvent" shall have the meaning set forth in Section 3.7(a)

below.

(h) "Insolvent Entity" shall have the meaning set forth in Section

3.7(a) below.

(i) "IRS" shall mean the Internal Revenue Service.

(j) "Participant" shall mean a person who is a participant in one or

more of the Plans in accordance with their terms and conditions.

(k) "Payment Schedule" shall have the meaning set forth in Section

3.6(b) below.

(l) "Plan(s)" shall mean those executive deferral plans or other

arrangements of the Company listed in Exhibit A.

(m) "Plan Year" shall mean the Plan Year chosen for this Master

Trust Agreement by the Board.

(n) "Trust Fund" shall mean the assets held by the Trustee pursuant

to the terms of this Master Trust Agreement and for the purposes

of the Plans.

1.6. GRANTOR TRUST. The Trust is intended to be a "grantor trust," of which

the Company and the Subsidiaries are the grantors, within the meaning of

subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal

Revenue Code of 1986, as amended, and the Trust shall be construed

accordingly.

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

ARTICLE 2

GENERAL ADMINISTRATION

2.1. COMMITTEE DIRECTIONS AND ADMINISTRATION BEFORE CHANGE IN CONTROL. Until

a Change in Control has occurred, this Section 2.l shall be effective

and the Committee shall direct the Trustee as to the administration of

the Trust in accordance with the following provisions.

(a) The Committee shall be identified to the Trustee by a copy of

the resolution of the Board appointing the Committee. In the

absence thereof, the Board shall be the Committee. Persons

authorized to give directions to the Trustee on behalf of the

Committee shall be identified to the Trustee by written notice

from the Committee, and such notice shall contain specimens of

the authorized signatures. The Trustee shall be entitled to rely

on such written notice as evidence of the identity and authority

of the persons appointed until a written cancellation of the

appointment, or the written appointment of a successor, is

received by the Trustee.

(b) Directions by the Committee, or its delegate, to the Trustee

shall be in writing and signed by the Committee or persons

authorized by the Committee, or may be made by such other method

as is acceptable to the Trustee.

(c) The Trustee may conclusively rely upon directions from the

Committee in taking any action with respect to this Master Trust

Agreement, including the making of payments from the Trust Fund

and the investment of the Trust Fund pursuant to this Master

Trust Agreement. The Trustee shall have no liability for actions

taken, or for failure to act, on the direction of the Committee.

The Trustee shall have no liability for failure to act in the

absence of proper written directions.

(d) The Trustee may request instructions from the Committee and

shall have no duty to act or liability for failure to act if

such instructions are not forthcoming from the Committee. If

requested instructions are not received within a reasonable

time, the Trustee may, but is under no duty to, act on its own

discretion to carry out the provisions of this Master Trust

Agreement in accordance with this Master Trust Agreement and the

Plans.

2.2. ADMINISTRATION UPON CHANGE IN CONTROL. In the event of a Change in

Control, the authority of the Committee to administer the Trust and

direct the Trustee, as set forth in Section 2.1 above, shall cease, and

the Trustee shall have complete authority to administer the Trust.

2.3. CONTRIBUTIONS. Except as provided in any Plan, the Company and the

Subsidiaries, in their sole discretion, may at any time, or from time to

time, make additional deposits of cash, marketable securities, annuities

or insurance policies in trust with the Trustee to augment the principal

to be held, administered and disposed of by the Trustee as provided in

this Master Trust Agreement. Neither the Trustee nor any Participant or

Beneficiary shall have any right to compel such additional deposits. The

Trustee shall have no duty to collect or enforce payment to it of any

contributions or to require that any contributions be made, and shall

have no duty to compute any

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

amount to be paid to it nor to determine whether amounts paid comply

with the terms of the Plans; provided, however, that following a Change

in Control, the Trustee shall have the right, in its sole and absolute

discretion, to compel a contribution to the Trust from the Company to

make up for any shortfall between (i) the anticipated benefit

obligations and administrative expenses that are to be paid under the

Plans and Trust and (ii) the assets of the Trust Fund.

2.4. TRUST FUND. The contributions received by the Trustee from the Company

and the Subsidiaries shall be held and administered pursuant to the

terms of this Master Trust Agreement as a single fund without

distinction between income and principal and without liability for the

payment of interest thereon except as expressly provided in this Master

Trust Agreement. During the term of this Trust, all income received by

the Trust, net of expenses and taxes, shall be accumulated and

reinvested.

2.5. DISTRIBUTION OF EXCESS TRUST FUND TO EMPLOYERS. In the event that the

Committee, prior to a Change in Control, or the Trustee in its sole and

absolute discretion, after a Change in Control, determines that the

Trust Fund exceeds 1125 percent of the anticipated benefit obligations

and administrative expenses that are to be paid under the Plans, the

Trustee, at the direction of the Committee prior to a Change in Control,

or in its sole and absolute discretion after a Change in Control, shall

distribute to the Company and the Subsidiaries such excess portion of

the Trust Fund.

ARTICLE 3

POWERS AND DUTIES OF TRUSTEE

3.1. INVESTMENT DIRECTIONS. Except as provided in this Section and Section

3.2 below, the Committee shall provide the Trustee with all investment

instructions in writing. The Trustee shall neither affect nor change

investments of the Trust Fund, except as directed in writing by the

Committee, and shall have no right, duty or responsibility to recommend

investments or investment changes; provided, that the Trustee may (i)

deposit cash on hand from time to time in any bank savings account,

certificate of deposit, or other instrument creating a deposit liability

for a bank, including the Trustee's own banking department, if the

Trustee is a bank, without such prior direction, or (ii) invest in

government securities, bonds with specific ratings, equities, or mutual

funds composed of such investments, all within broad investment

guidelines established by the Committee from time to time.

3.2. INVESTMENT UPON CHANGE IN CONTROL. In the event of a Change in Control,

the authority of the Committee to direct investments of the Trust Fund

shall cease and the Trustee shall have complete authority to direct

investments of the Trust Fund. The president of the Company shall notify

the Trustee in writing when a Change in Control has occurred. The

Trustee has no duty to inquire whether a Change in Control has occurred

and may rely on notification by the president of the Company of a Change

in Control; provided, however, that if any officer, former officer,

Director or former Director of the Company or any Subsidiary (other than

the president of the

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

Company), or any Participant notifies the Trustee that there has been or

there may be a Change in Control, the Trustee shall have the duty to

satisfy itself as to whether a Change in Control has in fact occurred.

The Company and the Subsidiaries shall indemnify and hold harmless the

Trustee for any damages or costs (including attorneys' fees) that may be

incurred because of reliance on the president's notice or lack thereof.

3.3. MANAGEMENT OF INVESTMENTS. Subject to Section 3.1 above, the Trustee

shall have, without exclusion, all powers conferred on the Trustee by

applicable law, unless expressly provided otherwise herein, and all

rights associated with assets of the Trust shall be exercised by the

Trustee or the person designated. by the Trustee, and shall in no event

be exercisable by or rest with Participants or their Beneficiaries. The

Trustee shall have full power and authority to invest and reinvest the

Trust Fund in any investment permitted by law, exercising the judgment

and care that persons of prudence, discretion and intelligence would

exercise under the circumstances then prevailing, considering the

probable income and safety of their capital, including, without limiting

the generality of the foregoing, the power:

(a) To invest and reinvest the Trust Fund, together with the income

therefrom, in common stock, preferred stock, convertible

preferred stock, mutual funds, bonds, debentures, convertible

debentures and bonds, mortgages, notes, time certificates of

deposit, commercial paper and other evidences of indebtedness

(including those issued by the Trustee or any of its

affiliates), other securities, policies of life insurance,

annuity contracts, options to buy or sell securities or other

assets, and other property of any kind (personal, real, or

mixed, and tangible or intangible); provided, however, that in

no event may the Trustee invest in securities (including stock

or rights to acquire stock) or obligations issued by the Company

or the Subsidiaries, other than a de minimis amount held in

common investment vehicles in which the Trustee invests;

(b) To deposit or invest all or any part of the assets of the Trust

Fund in savings accounts or certificates of deposit or other

deposits which bear a reasonable interest rate in a bank,

including the commercial department of the Trustee, if such bank

is supervised by the United States or any State;

(c) To hold, manage, and control all financial assets, forming part

of the Trust Fund and to sell, convey, transfer, exchange,

partition, lease for any term, even extending beyond the

duration of this Trust, and otherwise dispose of the same from

time to time in such manner, for such consideration, and upon

such terms and conditions as the Trustee shall determine;

(d) To have, respecting securities, all the rights, powers and

privileges of an owner, including the power to give proxies, pay

assessments and other sums deemed by the Trustee to be necessary

for the protection of the Trust Fund, to vote any corporate

stock either in person or by proxy, with or without power of

substitution, for any purpose; to participate in voting trusts,

pooling agreements, foreclosures, reorganizations,

consolidations,

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HAYNES INTERNATIONAL, INC.

Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

mergers and liquidations, and in connection therewith to deposit

securities with and transfer title to any protective or other

committee under such terms as the Trustee may deem advisable; to

exercise or sell stock subscriptions or conversion rights; and,

regardless of any limitation elsewhere in this instrument

relative to investment by the Trustee, to accept and retain as

an investment any securities or other property received through

the exercise of any of the foregoing powers;

(e) To hold in cash, without liability for interest, such portion of

the Trust Fund which, in its discretion, shall be reasonable

under the circumstances, pending investments, or payment of

expenses, or the distribution of benefits;

(f) To take such actions as may be necessary or desirable to protect

the Trust Fund from loss due to the default on mortgages held in

the Trust including the appointment of agents or trustees in

such other jurisdictions as may seem desirable, to transfer

property to such agents or trustees, to grant such powers as are

necessary or desirable to protect the Trust or its assets, to

direct such agents or trustees, or to delegate such power to

direct, and to remove such agents or trustees;

(g) To employ such agents including custodians and counsel as may be

reasonably necessary and to pay them reasonable compensation; to

settle, compromise or abandon all claims and demands in favor of

or against the Trust assets;

(h) To cause title to property of the Trust to be issued, held or

registered in the individual name of the Trustee, or in the name

of its nominee(es) or agents, or in such form that title will

pass by delivery;

(i) To exercise all of the further rights, powers, options and

privileges granted, provided for, or vested in trustees

generally under the laws of the State whose laws are applicable

to this Master Trust Agreement, as provided in Section 10.5

below, so that the powers conferred upon the Trustee herein

shall not be in limitation of any authority conferred by law,

but shall be in addition thereto;

(j) To borrow money from any source (including the Trustee) and to

execute promissory notes, mortgages or other obligations and to

pledge or mortgage any Trust assets as security;

(k) To lend certificates representing stocks, bonds, or other

securities to any brokerage or other firm selected by the

Trustee;

(l) To institute, compromise and defend actions and proceedings; to

pay or contest any claim; to settle a claim by or against the

Trustee by compromise, arbitration, or otherwise; to release, in

whole or in part, any claim belonging to the Trust to the extent

that the claim is uncollectible;

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Supplemental Executive Retirement Plan(s)

MASTER TRUST AGREEMENT

(m) To use securities depositories or custodians and to allow such

securities as may be held by a depository or custodian to be

registered in the name of such depository or its nominee or in

the name of such custodian or its nominee;

(n) To invest the Trust Fund from time to time in one or more

investment funds, which funds shall be registered under the

Investment Company Act of 1940; and

(o) To do all other acts necessary or desirable for the proper

administration of the Trust Fund, as if the Trustee were the

absolute owner thereof.

However, nothing in this section shall be construed to mean the Trustee

assumes any responsibility for the performance of any investment made by

the Trustee in its capacity as trustee under the operations of this

Master Trust Agreement. Notwithstanding any powers granted to the

Trustee pursuant to this Master Trust Agreement or to applicable law,

the 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 of 1986, as amended.

3.4. SECURITIES. Voting or other rights in securities shall be exercised by

the person or entity responsible for directing such investments, and the

Trustee shall have no duty to exercise voting or proxy or other rights

relating to any investment managed or directed by the Committee. If any

foreign securities are purchased pursuant to the direction of the

Committee, it shall be the responsibility of the person or entity

responsible for directing such investments to advise the Trustee in

writing of any laws or regulations, either foreign or domestic, that

apply to such foreign securities or to the receipt of dividends or

interest on such securities.